Is Online Gambling Legal In The US?

To be or not to be…

Technically, the whole area is very grey, with some very black ‘no way, don’t do it’ patches. For now at least. The regulations differ state by state, and a slow but steady movement towards liberalising the market has started. It all depends on your and their definitions of what is, in fact, online gambling.

History of online gambling in the US

First there was nothing. Then there was The Internet. And on the second day, the very first website was taking bets from fellow human beings. Online gambling online and the internet are as close, one to the other, as social media is with picture of cats. Years later, and online gambling is now a thriving and growing industry as more and more people take to gambling in the comfort of their homes, rather than having to visit a land based casino down the street. Visiting Vegas or Atlantic City can give you the kind of thrills and lifetime of memories you’ll try for the rest of your life to either remember or forget. But heading out to the city of lights on a regular basis just isn’t feasible for many of us on a regular basis.

The ease of switching on your computer, or more recently iPad or tablet, and playing a few spins on the slots or a hand of poker or two is now fairly normal. Ok, it’s still not always accepted, with many of us not admitting to our recreational habits, but let us tell you. You are not alone. The number of players has grown exponentially year in, year out, making the industry millions, even billions over the years. And for the same reason some of us still keep gambling a secret, this boost in online gamblers created a controversy around the subject. Gambling in Vegas? Sure. No problem. But online? How are we going to tax these online casinos based in Curacao and Malta? And our tax paying land-based casino sure are complaining a lot. Not to mention that these off shore casinos could be taking anyone as a client. Addicts, under-age… how do we regulate?

States in the US began to start banning gambling and in around 2004. A law was passed that didn’t make gambling online illegal, but it made it very hard for any player or casino to make or allow any deposits or withdrawals through the use of banks. The Internet Funding Prohibition Act in fact made it a federal law that it was illegal for banks to handle any transactions in association with gambling. This in turn dramatically hit the online casinos where it hurt (their bottom line) and as such wiped out instantly a whole industry in the US, from which companies now had to look further afield for their income.

A few years later another law was passed under the Internet Gambling Prohibition and Enforcement act which called for all online gambling to be outlawed in the US. But what exactly constitutes gambling? Well… here is where it all starts to look a little grey.

The term gambling, you would think, covers pretty much any form of gambling whether it be playing a game of skill like poker, or a game of chance like slots. Or even, in fact, playing the lottery (also a game of chance and luck). But there are fine lines between what is seen as a game of skill and what is seen as a game of chance. Many would think poker is a skill game, even blackjack could be seen as one but apparently all states govern them to be games of chance.

Playing with the stock market, a game of luck and possible some skill, is perfectly legal in all states, just in case you wondering. Is Sports betting not just as much skill and luck? Not only that but the lottery, something Americans all over the US love and enjoy, is purely a game of chance but is seen as perfectly acceptable and legal. Yet the lottery has worse odds than if you were playing on slots online. So figure that one out.

Getting back on track

Recently there has been movement in relaxing the laws on online gambling. We have already seen a shift where a couple of states like Nevada and New Jersey have independently been fighting to legalise games of chance and have succeeded. We expect many more to follow suit as the US gambling market and industry sees a revival over the coming years especially with the advent of mobile gambling expected to reach figures around the $90 billion mark worldwide in a few years time.

Obviously a tighter control on the situation can be expected where companies are required to be fully licensed and regulated, along with enforcing that they look after their players, allowing only those that are of legal age to gamble and providing support to players who suffer from gambling addictions.

So to answer our initial question of: is it legal to gamble online in the US? In 37 states you can legally bet online in games of skill (remember depends what is determined as a game of skill in each state), in 3 including, Nevada, New Jersey and Delaware you can gamble in skill and chance at regulated operators. For the rest, sorry but your out of luck at the moment.

We’ll continue to watch out for any major changes and keep you updated of any movements concerning the state of play of online gambling in America.