For those who are interested in online casino games, one possible question to strike their minds is: are these online activities legal and abide by the law? We'll be discussing more on regulations on U.S. in this discussion area.
As in United States, Grohman (2006) said that it is hard to ban the activities of online gambling if there exist financial intermediaries that help the transfer the betting money.With the implementation of financial intermediaries such as credit card companies which may include Visa and Mastercard, it is found hard to sue the websites for legal prosecution on online casino games. Online gamblers use credit card methods to pay and receive money that they won by creating a bank account.
One of the few laws implemented in U.S. include the Unlawful Internet Gambling Enforcement Act (UIGEA) which was enacted in 2006 to restrict payment systems being used by U.S. locals to complete transactions with internet gambling sites (Gambling Online: Is It Legal? 2010). A regulated Internet Gambling framework could help in preserving consumers and ensure these transactions are formal. Legality: Online Casinos and U.S. Legislation (2010) shown that estimates of 80% of online wagers of U.S. are online poker players. This had shown that it is hard to ban internet casino gambling as this would be cutting off the wages of poker players that depend on skillful gambling as a job.
Besides that, Wire Act is also one of the federal laws implemented to prosecute federal level gambling cases (Internet Gambling: An overview of the Issues 2002). Besides that, Travel Act and Illegal Gambling Business Act had also been on pace to ban international bets. Criminal penalties are imposed under Travel Act for person who distributes proceeds of unlawful activity. On the other hand, Illegal Gambling Business Act claimed that it is illegal to operate gambling business. As stated in Internet Gambling: An overview of the Issues (2002), these acts are enacted to gambling businesses and not individual internet gamblers.
Nonetheless, banking sector had always been taking an initiative to help prosecute internet gambling. Credit card associations tend to impose a restriction on credit cards when their customers deal with such transactions (Internet Gambling: An overview of the Issues 2002). As from the other side, banking sectors prevent gambling website organisations from creating an account for such business purposes too.
However, efforts had been taken in U.S. to legalize online gambling. Dodge (2010) claimed that some Internet gambling would be legalized and to allow U.S. citizens to get involved in internet casino games. One of Massachusetts Democrat suggested that residents should be free to do what they want (Dodge 2010).
Generally, it is still a big issue on regulating internet gambling among consumers. Although efforts had been taken, it still seems a big question of when would internet casino gambling be legalized. Next, we'll discuss a few issues on how gambling website organisations tend to escape these enacted laws.
Reference
Dodge, C 2010, House Panel Passes Measure to Legalize Some Internet Gambling, Bloomberg, viewed 5 October 2010, http://www.bloomberg.com/news/2010-07-28/house-panel-passes-frank-backed-measure-to-legalize-some-internet-gambling.html.
Gambling Online: Is It Legal? 2010, viewed 5 October 2010, http://www.the-surfs-up.com/news/gamblingonlinenews.html.
Grohman, C 2006, 'Reconsidering Regulation: A Historical View of the Legality of Internet Poker and Discussion of the Internet Gambling Ban of 2006', Journal of Legal Technology Risk Management, vol 1, no.1, pp. 37.
Internet Gambling: An overview of the Issues 2002, United States General Accounting Office, GAO-03-89, Pp 15, viewed 5 October 2010, http://www.gao.gov/new.items/d0389.pdf.
Hi Alan and Gavin,
ReplyDeleteApart from implementing laws, the United States has also taken further action to restrict the activities of online gambling. Since there are increasing online gamblers using credit cards method for receipts and payments through a bank account, many large U.S. credit card companies have tried to impose restrictions on the use of their cards for online gambling activities (Internet Gambling – An overview of the issues 2002). They developed transaction codes that deny authorisation for internet gambling transactions to block the card holders from making payments. U.S. based banks have also rejected gambling websites as merchants. As a result, Internet Gambling – An overview of the issues (2002) stated that “…these restrictions have caused gaming analysts to lower their 2003 revenue projections for the on-line gaming industry”.
Besides the United States, there are also other countries implementing laws related to Internet gambling, which includes Australia, Canada and Hong Kong. According to the article, Internet Gambling – An overview of the issues (2002), in Australia, there is the enactment of Interactive Gambling Act 2001 that bans gambling services, offered by both Australia-based and foreign-owned businesses to be provided to local residents. The Criminal Code of Canada restricts gambling activities to be carried out within the country, while the Hong Kong government has approved the Gambling Ordinance that prohibits offshore gambles.
‘Internet gambling – An overview of the issues’ 2002, United States General Accounting Office (GAO), viewed 7th October 2010, www.gao.gov/new.items/d0389.pdf
In U.S., a person cannot own an online gambling site without a license. However, there is no state that provides the license. Besides that, each state has a different set of regulations when it comes to online gambling.
ReplyDeleteOther than that, there are differences between making bets, taking bets, facilitating payments to casinos and others. In addition, it also has difference between casino wagering and sports betting.
As there is no federal law exists to prevent U.S. citizens from engaging in online gambling or any related activity. People should concern more about the potential risk of each activity instead of considering the law. The greater the risk, it is more likely to result in a fine or even jail time.
Summary of risk level (From most risky to least risky)
Risk Level 9/9:
- Taking bets on a server located in the U.S.
- Taking sports bets over U.S phone lines
Risk Level 8/9:
- Taking sports bets on an offshore server and then visiting the U.S.
- Facilitating the transfer of funds to online gambling operators (payment processing) whether in the U.S. or not.
Risk Level 7/9:
- Taking casino / poker bets from U.S. players on a website outside the U.S.
Risk Level 6/9:
- Helping people make bets on a website
Risk Level 5/9:
- Accepting advertising for Internet gambling, in the major media
Risk Level 3/9:
- Accepting advertising for Internet gambling, in the smaller media
Risk Level 2/9:
- Buying advertising as a casino, poker room, or affiliate
Risk Level 1/9:
- Making bets on the internet.
U.S legislation about online gambling has continues to be very unclear. Even though it has been banned under the Unlawful Internet Gambling Enforcement Act; fantasy sports, online lotteries and horse racing are among the exceptions. Therefore, online gambling is sometimes legal and sometimes it is not legal. It depends on different circumstances.
Reference:
Is online gambling legal in U.S.?, viewed 9th October 2010,
http://vegasclick.com/online/legal.html
Legality – Online casino school, viewed 9th October 2010,
http://www.onlinecasinoreports.com/school/legality/