The state of gambling regulations in the USA

The state of gambling regulations in the USA

The United States has a potpourri of gambling regulations, with the states of Nevada, Delaware, and New Jersey allowing some aspect of online gambling. Until recently, the U.S. Federal government stated that online gambling was unlawful. But in 2011, the Justice Department handed down a legal opinion that only sports betting would be considered illegal. The U.S. is in a state of quandary with the government policies on online gambling laws because of Congress. Congress has chosen to keep hypocritical laws that allow certain types of online gambling activity, such as betting on horse racing, but prohibits gambling games like poker and bingo.

Even though online gambling isn’t totally regulated in the United States right now, thousands of Americans are gambling online with overseas entities, outside of U.S. jurisdiction. However, there are state and federal consortium’s, made up of internet gambling proponents, who are trying to convince the government to create two formal oversight and enforcement bills or regulations. Their proposed bills would give the government full oversight power on Internet gambling, while another bill would call for the creation of an “Office of Internet Poker Oversight.”

New Jersey’s Governor Christie and Senator Lisniak are working together to make New Jersey’s online gambling, a global invitation. Their introduction to a new bill would allow international companies to establish a base within the State, but to offer Internet gambling to people in other countries, as well as to allow sports betting. Their supposition is that with the Atlantic City casino closings and job losses, sports betting would be the lifeline that New Jersey needs to put people back to work and to further generate billions in economic activity in a substantially growing industry.

With the passing of a sports betting bill, the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013, said that states would be free to license intrastate online poker and casino style games, under proper federal regulatory oversight. A bill like this would give the U.S. valuable tax revenues, rather than having offshore Internet gambling operators benefit from a tax free marketplace. A study done by Morgan Stanley reported that if online gambling is allowed, by the year 2020, it would generate $9.3 billion annually. The American Gambling Association further stated that a regulated online gaming presence in the United States would create 22,000 jobs, while generating upwards of $26 billion in tax revenues.

The passing of the Unlawful Internet Gambling Enforcement Act (“UIGEA”) in 2006, prohibits online businesses from “accepting payments in connection with the participation of another person in a bet or wager.” The UIGEA concentrates specifically on financial transaction and not so much on the gambling aspect. The Act prohibits gambling businesses from accepting payments in participation of another person across the Internet. Despite opposition from the government policies on online gambling, Americans continue to gamble online every year to the tune of $4 billion for offshore entities and $0 to most U.S. states. Though online gambling is still considered illegal, the future of online gambling is a positive one because advocates are fighting continuously to legalize it through legislation where Indian casinos, state run lotteries, card and game clubs will prevail, convincing lawmakers to change their mind, due to the much needed tax revenue that it would generate.


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