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Will the US ever legalize online gambling?

Written by:
Payton
Published on:
Mar/10/2021

The increased popularity of online gambling all over the world made locals, state and federal lawmakers in the US, and more importantly, the general public to get more and more ready to meet the new reality. The individual states have the ability to approve sports betting, and not only. Among them are real money online casino games, digital slots, and internet poker. 

It should be noted that state-level lawmakers are more devoted to succeeding in new, lighten regulations than the federal government. This is why there is Federal Gambling law and State Gambling Laws in the US. 

Federal Gambling Laws

Federal gambling laws are more restrictive than state laws in terms of regulating online gambling. Legislation on online gambling in the United States was first drafted in the late 1990s. Bob Goodlatte and Jon Kyl introduced bills to the Senate that would control online gambling activities except for those that involved horse and dog races and state lotteries. However, the bill did not pass. 

 

Federal Wire Act - still remains the most important online gambling law in the US. Even though it was imposed before the internet boom, it still encompasses online gambling. The bill specifically forbids transmission (or “wiring”) of information and payments regarding sports betting across state lines. In 2011 it opened the door to other types of gambling, but not sports bets. In 2018, the Trump Administration changed the 2011 interpretation of the law to extend to all forms of cross-state gaming, potentially threatening the legality of online lottery, poker, and more. That decision was challenged by multiple stakeholders, and a lower court has ruled in favor of the plaintiffs, postponing any impact on forms of gaming outside sports betting. 

UIGEA - The Unlawful Internet Gaming Enforcement Act (UIGEA) is a very considerable authority over the American gaming industry. The main rule of the authority is that UIGEA forbids online gaming entities from receiving funds, though payment processors may still accept bets in states that explicitly legalize real-money internet gambling.

The gambling regulations, as we have mentioned above, many states have different rules and regulations on online gambling. Online casino and sports betting are legal in Nevada, Michigan, Pennsylvania, West Virginia, and New Jersey. More states have legalized some sports betting, such as Colorado, Montana, Iowa, Mississippi, etc, and the majority of states are expecting action. In 2020 the situation was changed dramatically, as we had a global pandemic all over the world which led to the increase of digital coins and cryptocurrencies generally, which had a direct impact on online gambling websites. More and more online casino websites started to suggest to their clients cryptocurrency transactions, to use digital coins for gambling and due to the fact that it does not track the transactions and the government is unable to control where the money goes, the number of Bitcoin gambling sites accepting US players increased dramatically. Due to all those changes, US players were given the opportunity to gamble from their homes, without going out and using their digital coins for that and the state or federal government would not be able to track the transactions because it is not regulated by any authority and blockchain technology guarantees full anonymity. 

State Gambling Laws in the US

The US laws and regulations are different from state to state and it applies to almost all sectors or industries, among them is online gambling. Some states, such as Hawaii and Utah, ban all forms of gaming while others, such as New Jersey and Pennsylvania, permit nearly every form of commercial gaming.

All sorts of internet casino gaming are illegal in every state that does not legalize the games generally. A player, who is using an unregulated gambling site in any state (except  New Jersey, Nevada, Delaware, Pennsylvania) is technically breaking federal law and will be arrested for making an illegal action. However, Sports betting is legalized in many more states, New Jersey, Pennsylvania, Nevada, Delaware, West Virginia, Mississippi, New Mexico, Rhode Island, Iowa, Indiana, New York, Arkansas, and Oregon. 

We can say from the experience, that those actions have a domino effect because once the state starts discussing the issue, it starts to become an active topic in the neighboring states as well. However, online gaming such as poker, slots, and digital card games have been more controversial and discussed than some of these other forms. Centuries of gambling hatred still remain rooted in much of the country and many lawmakers are concerned about the easy access of real money online casino games.

States that consider legalizing online gambling 

California - California is trying to legalize this action for the last decade already. However, the conversation was always regarding sports betting, not online casinos. Those, who observe the situation, aren’t that positive about gambling expansion in the state in the near future, though lawmakers have made paces in finding common ground with state tribes, which enjoy gaming exclusivity.
New York - the state has legalized sports betting but not online wagering. The lawmakers are trying to support mobile betting as well. 

Massachusetts - the state has passed several laws and regulations in favor of online gambling in the past recent years. The state Gaming Commission has become frequently expressive on the topic, as has the Lottery, suggesting that momentum may be approaching a critical core.

Arizona - the state is actively trying to legalize sports betting. The main leverage of proponents is that the state would get $24 million approximately through taxes

Maryland - the state and its population have approved sports betting through the referendum in 2020. Now, the lawmakers are conducting the discussion, what the market would look like and the rules for it. 

Connecticut - the talks have still hindered the passage of sports betting. Those who oppose it, see sports betting as a part of casino games. However, discussions seem to be going in the correct direction. 

Conclusion 

Finally, to summarize, the absolute answer on when the legalization of online gambling will be official throughout the US is a matter of time. The US law and legislation are based on the decision which will be made first, on the Federal level and then, the state level or vice versa. As we have seen, there are several states that have fully legalized online gambling, while others are having it banned and the majority is having a discussion regarding it. As we have mentioned above, some states are very close to make online gambling official but the exact date is unknown. We can boldly say that there is a long way before making it fully legalized in all the states, as the tendency is going very slowly. 

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