Online gambling is a relatively new phenomenon in the United States. The internet has facilitated wagering on games of chance and skill and even fantasy sports. As an example, anyone with a computer, web browser and credit card can place wagers at an online poker site. In addition to the traditional casino and racebook, there are also betting sites and lottery sites. Some states allow the online gambling industry to operate within their borders, while others have outlawed it.
There are several federal statutes involved in the legal online gambling arena. The federal Wire Act regulates wagering businesses that offer wagering services. It also has an exception for acts that are legal in both the source and destination states. An example of the former is online poker, which is very popular in Pennsylvania thanks to the presence of PokerStars. However, the Wire Act is not applicable to digital wagering.
On the state level, New Jersey became the first state to allow online casinos and poker. Its gaming regulator, the Division of Gaming Enforcement, has also regulated the Internet gambling scene in the Garden State. Several other states have introduced legislation to regulate online gambling. Michigan, for instance, was the fifth US state to legalize poker in digital form. This act positioned the state as a serious player in the mobile sports betting market.
Although the law is not perfect, the Department of Justice has provided states with the opportunity to legalize or decriminalize their own versions of online gambling. As a result, twenty states now permit residents to wager on sporting events online. While some have imposed age restrictions, such as New Jersey, others are more liberal. These laws have also raised some questions as to what exactly is legal and what is not.
Nevertheless, it is hard to argue with the fact that online gambling is a growing industry. One of the main arguments against internet gambling is that it has a high risk of creating a culture of gambling and gambling addicts. Furthermore, the fact that an online gambling business can be located offshore and accessed from anywhere in the world can complicate its regulatory regime. Nonetheless, states have not been particularly active in enforcing Internet gambling laws.
As a result, the law has not been able to keep pace with the development of the Internet gambling industry. To prevent this, lawmakers have introduced multiple bills to soften the federal Internet gambling law. One such bill, the Online Gambling Regulation and Tax Enforcement Act, would license and tax internet gambling businesses. Another, the Skill Game Protection Act, is aimed at clarifying the Wire Act. Whether or not this bill is a viable solution remains to be seen.
As the Department of Justice has shown, the UIGEA is only one of several statutes that are cited by the department in their efforts to rein in the illegal online gambling industry. Moreover, some of the statutes mentioned in the UIGEA have been challenged on constitutional grounds.