Federal Gambling Statute



When discussing legal online sports betting, the majority of America's government has a very regressive, prohibition-style attitude towards it, buying into a negative perspective concerning the morality of gambling entertainment. This is what has led to a variety of state gambling laws in the past.

Learn about U.S. Federal gambling laws, social gambling laws and get assistance as required. Visit our website now to get advice on illegal gambling. Federal gambling statutes include: the Wire Act the Unlawful Internet Gambling Enforcement Act (UIGEA).

There are no US federal laws that make it a crime for Americans to place bets at offshore sportsbooks that are operating legally within the industry. There are two states that legally prohibit all online gambling, domestic or offshore, leaving residents in Connecticut and Washington without legally sanctioned online betting options, though they have yet to start enforcing those restrictions.

For the most part, state lawmakers are becoming more progressive concerning betting entertainment and recognize the value that this type of revenue stream can bring to a state. Individual states are actively analyzing what the legalization of domestic sports gambling can provide them with in terms of opportunities, tourism, and tax revenue, and many have already taken action one way or the other through new legislation.

Iowa, Nevada, New Jersey, Oregon, Pennsylvania, Rhode Island, and West Virginia currently permit state-regulated online sports gambling, with nearly two dozen additional states having launched land-based sportsbooks. Individual territories began embracing sports betting the moment that PASPA was ruled unconstitutional by the Supreme Court in the infamous NJ case, with multiple states having had their legislation ready and waiting should the ruling go in the Garden State's favor.

Below we'll take a look at the relevant US federal gambling laws, and explain how state gambling laws intersect with federal laws to impact online and brick and mortar sportsbook gambling, as well as what these laws have to say about the legal status of offshore sports betting entertainment.

Federal gambling statute

The Federal Laws on the Books

The sections below will detail and explain how each major federal law affects domestic gambling opportunities in the US.

The Federal Wire Act

Passed back in 1961, the Federal Wire Act was made law in an effort to curtail the illegal gambling activities taking place over the phone by organized crime syndicates. It prohibited the transmission of wagers or betting information from being carried across state lines via telegraph or telephone. The Federal Wire Act targeted these illegal bookie operations as a means to curb the mafia from manipulating games and making a profit through these tactics.

This law was strictly focused on interstate gambling, and only targeted those accepting bets and not the individuals placing the bets. The goal was to crack down on illegal gambling services, not prosecute bettors. Between the DOJ Legal Opinion of 2011 and the repeal of PASPA, today's application of the Wire Act prohibits any gambling business from accepting bets across state lines or from foreign sources.

With the changes still being implemented, we are not sure yet how this will affect those states that had entered into interstate gambling pacts with one another, sharing player pools for their online gambling initiatives. Once that aspect of the legal situation becomes more clear we will update that information here.

The Professional and Amateur Sports Protection Act

Also known as the Bradley Act, or just PASPA, the Professional and Amateur Sports Protection Act was a sweeping federal regulation that passed in 1992, with the supposed intent of protecting the integrity of sports by making sports betting illegal.

At the time the bill was passed, there were sports lotteries in Delaware, Montana, and Oregon, as well as licensed and regulated sports betting in Nevada, so those four states were exempt.

The law effectively prevented the expansion of the sports betting market throughout the United States in what many categorized as a discriminatory law that favored a few states while restricting others.

New Jersey took on the mission of challenging the law and after several years of court battles, was given a favorable outcome by the highest court in the land as SCOTUS ruled PASPA as unconstitutional, nullifying the law.

As of May 14, 2018, each individual state now has the authority to dictate sports betting laws within their borders. They can now choose to authorize or prohibit sports betting at their pleasure. Following PASPA's repeal, we have seen multiple states move forward with legislation that legalizes sports gambling at the state level.

The Unlawful Internet Gambling Enforcement Act

This is the big one that shook the gambling industry to its core. Online gambling really started to explode during the early 2000's, especially in the realm of online poker. In 2006, then-President Bush signed into law the Unlawful Internet Gambling Enforcement Act, known all over as the UIGEA. In a nutshell, the UIGEA placed very stringent regulatory restrictions concerning how gambling-related transactions could be processed.

The most reputable sites started a countdown and allowed Americans to withdraw and closeout their accounts. Many trusted gambling sites left the US market at this time. After the dust settled, and the financial and gambling industries learned how to comply with the regulatory oversight provided by the UIGEA, many of these reputable gambling sites have returned to provide services to US sports bettors.

The UIGEA did end up making the online gambling market safer for both the bettors and the operators by imposing a more reliable and stricter regulatory structure for how gambling-related transactions are processed. Gambling sites invested in top tier payment processors while all parties implemented higher-level security protocols to ensure the validity and safety of those transactions that are processed.

While US online gambling funding options are still somewhat limited in some regards, things have stabilized. The emergence of cryptocurrencies have filled the void left by the elimination of US-friendly e-wallets and failed credit card transactions. The UIGEA does not make it illegal for Americans to gamble online. The law simply regulates how online gambling transactions are processed.

The 2011 Department of Justice's Interpretation of Federal Laws

With the growth of online commerce, several states became interested in offering lottery game services online. This raised questions concerning the application of the Federal Wire Act, driving the DOJ to issue a clarification of the law's reach.

The Department of Justice ruled, and accurately so, that the federal government had no right to tell states that they could not sanction online gambling and therefore established that each US state has the authority to determine their own fate concerning online gambling with the exception of sports betting.

The repeal of PASPA took care of freeing sports gambling as the last remaining federally prohibited form of state-regulated online gambling. As of now, all 50 states have the legal ability to legalize and offer online gambling such as casinos, poker, bingo, and sports wagering. To date, only a handful of states have taken advantage of legal domestic online gambling. However, many states have pending bills to allow various forms of sports betting.

The 2019 DOJ Interpretation of Federal Gambling Laws

Following the repeal of PASPA in 2018, the reach of the Federal Wire Act has again come into question. In a new interpretation, which many believe was coerced by anti-online gambling activist Sheldon Adelson, the Department of Justice has indicated that the Wire Act prohibits not only interstate wagers but also the sharing of information across state lines.

This determination will certainly harm those states that have entered into interstate gambling compacts to share player pools and resources with other states. The opinion is being formally challenged through a lawsuit headed up by New Hampshire. As the situation unfolds, we will provide updates here.

What You Need to Know Going Forward

All of this legal information is good knowledge to have under your belt, no doubt about it. However, all you really need to know going forward is that there are no federal laws making gambling illegal in the United States either online or offline, and this includes domestic and offshore sports betting. States now determine the legal status of all gambling entertainment within their borders. As a sports betting resource guide, we want to make this point clear.

For those of you interested in betting on sport but who live in a state that has not authorized state-regulated sportsbooks, you'll have to either travel to a state with legalized sports betting or use a legitimate offshore sportsbook such as the ones you find listed on this site. You can check out our list of states that allow sports betting here or follow our list of recommended online sportsbooks.

US Gambling Laws

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When it comes to United States Online Gambling Laws, the water is a little bit ‘murky’ to say the least. There has been some legislation put in place which restricts credit card use in regards to online gambling transactions, however specific directives prohibiting online gambling at large are not in place that span the United States as a whole. This fact is actually one of the motivations for this site. It quickly became clear that the individual states were going to need to address how they feel about online gambling within their own borders.

Most USA gambling enthusiasts don’t have a problem with the ‘states’ rights’ approach on the topic as it is likely to lend more viability to a variety of solutions, allowing the people in each state to have a voice in the matter. While this may not guarantee that online gambling will be legal in every corner of the United States in years to come, it does make it more likely that those people who want access to it will have the opportunity to keep it or make it legal where they reside. Likewise, it gives those opposed a voice in rejecting the venue. After all, this is the American way. But when it comes to down brass tacks in the here and now, there are no United States online gambling laws which completely prohibit it. The many ‘gray’ areas and non-specific language have left the real focus on payment methods, and not the actual participation in online gambling itself.

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Gambling Laws By State

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USA Gambling Laws

Federal gambling statutes

The Federal Wire Act – This US federal laws was passed in 1961 to target illegal gambling operations being run by organized crime syndicates. The law has now been applied to Internet gambling and effectively prohibits US based online sports betting. This section of our guide provides insight into the application of this law and how it affected online gambling in the United States.

The Professional and Amateur Sports Protection Act (PASPA) – This law was passed in the early 90s as an effort to curtail the expansion of legal sports betting in the US. It effectively banned physical sportsbook businesses across the country. There are four states that were exempted from the restrictions of this law, including Nevada, Delaware, Montana and Oregon. On May 14, 2018, PASPA was ruled to be unconstitutional by the United States Supreme Court, who lifted the ban on US based sports betting. This page of our website provides insight into PASPA and the states that are challenging the constitutionality of it.

The Unlawful Internet Gambling Enforcement Act (UIGEA) – This law really has nothing to do with gamblers themselves, but rather is directed at gambling business operators and payment processors. This laws does not prohibit any type of online gambling and was passed to provide regulatory oversight concerning gambling related transactions and how they are processed. This page will explain the intent and application of this law and how it impacts the US gambling market.

Popular USA Online Gambling Sections

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Federal Gambling Statute

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Federal Gambling Regulations

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Federal Gambling Statutes

Online Gambling Laws – Get the 411 surrounding online gambling laws for your state. Find out which online casinos, poker rooms, sportsbooks, or bingo halls are available for you to enjoy an exhilarating online gambling experience that is also legal!!