Federal Law Against Illegal Gambling

1. Federal Law Against Illegal Gambling Losses
2. Federal Law Against Illegal Gambling Laws
3. Federal Law Against Illegal Gambling Philippines

In the United States, both the Federal government and individual state governments are responsible for regulating gaming within their jurisdiction. The Federal government has designated some forms of gambling as prohibited within the US and has created laws that are non-negotiable in the regulation of such prohibited activities. On this subject, the Federal government may outlaw any form of gambling and states must abide by their law as Federal regulation will always trump state laws. It is important to any country’s gambling laws in order to stay within the country’s legal guidelines.

Gambling activities by persons under age eighteen prohibited — Penalties — Jurisdiction — In-house controlled purchase programs authorized. 9.46.231 Gambling devices, real and personal property — Seizure and forfeiture. The Federal Wire Act Law Of 1961. Federal gambling law prohibits the operation of interstate betting activities in the United States. The Federal Wire Act, also known as the Interstate Wire Act of 1961, specifically made it illegal for illicitly run US-based sports gambling businesses to utilize any form of wire communications to send or accept betting information and wagers from across state lines or foreign US-owned territories.

States, however, are permitted to maintain their own regulations and prohibitions on acceptable forms of gambling as dictated by Federal regulations. So long as state laws align and do not challenge or disobey Federal gaming laws they are free to control, oversee, and manage to gamble within their state. Usually, states create and employ gaming control boards or special gaming commissions to supervise gambling activities within their state borders. State laws are subject to their specific state and do not have jurisdiction or power to control laws in other states. Therefore, gambling laws can differ greatly between states.

Active Federal Laws And Regulations In The United States That Affect Online Gambling

The United States maintains several significant federal gambling laws that greatly affect how gambling is regulated and permitted throughout the nation. Each law provides its own in-depth explanation, reasoning, and history behind its creation and implementation. On this page we summarize the laws, however, to gain a comprehensive understanding of the background of each federal law simply follow the highlighted links to resource guide that provides a greater depth of explanation.

Federal Wire Act – To combat prolific organized crime surrounding illegal bookmaking, then President John F. Kennedy enacted this law which effectively outlawed betting businesses from using phones to accept, place, or transmit interstate or foreign wagers on sports. At the time, this federal law greatly minimized domestic mafia bookmaking operations. The law has recently been interpreted by the US Department of Justice as effectively prohibiting U.S. based online sportsbooks from operating within the nation’s borders. Therefore it is a crime to operate an online sportsbook on US soil. The law does not prohibit USA residents from engaging in online sports betting at a legitimately licensed and regulated sportsbook that is legally operating outside of the United States.

DOJ Formal Opinion – In 2011, the DOJ and the Office of Legal Counsel released a memo that explained their formal interpretation of the Federal Wire Act that countered against the previous position the Criminal Division of the DOJ had taken. The memo stated that their prohibition on US-based Internet gaming only applied to online sports wagering. This clarification effectively allowed U.S. states to determine their destiny regarding online gambling as long as it doesn’t entail betting on sports. Therefore online casinos and poker sites are now legally permissible should a state decide to legalize these forms of betting entertainment.

UIGEA – This federal law is specifically aimed at online gaming operators and online gaming payment processors to curb illegal financial crimes, fraud, and money laundering through internet gaming activities. Financial institutions were thus barred from permitting direct transactions to online gaming service providers and given specific regulations on how they may process such transactions. In essence, the law provides regulatory oversight regarding how the online gambling transactions of USA residents are processed. The law does not make online gambling illegal.

PASPA – Once acted as the governing law over the prohibition of brick and mortar sports wagering throughout the US, with the exception of four exempted states. These four states had already implemented some type of active sports wagering or had pending sports legislation in place by a specified deadline and therefore were deemed exempt from the restrictions enacted by PASPA. The exemption was also offered to New Jersey due to their thriving Atlantic City gambling entertainment market, however, the state failed to take advantage of this option and allowed the deadline to pass. However, in 2018 SCOTUS reviewed PASPA and on May 14th ruled it unconstitutional and void. This law is no longer effctive in the land of the free.

RAWA – A preemptive bill yet decided upon intends to rewrite the Federal Wire Act of 1961 to extend prohibitions to include all forms of online gaming. If passed, this law would violently impact the current and future USA online gambling market as it does not include carve-outs for existing state-regulated online gambling platforms such as those initiated in Delaware, New Jersey, and Nevada – effectively making all online gaming in the USA illegal immediately.

State Gambling Laws

Individual states maintain the authority to allow or prohibit any form of gambling within their borders that are not expressly prohibited by US federal gambling laws. Due to the differing climate of states and their individual positions regarding legal forms of gambling entertainment, it is crucial to provide up to date information on what each US state permits and forbids in order to deliver the most accurate information for our readers. Therefore, we have specialized state focused pages to deliver the most current information on gaming laws and permissible gaming entertainment within their borders. Not only that, we provide here a state-specific gambling entertainment bill tracker to keep Americans updated on upcoming legal forms of betting entertainment in their state and inform them of newly enacted or retracted gambling laws.

Who Regulates Gambling in The United States?

At the federal level, there are multiple agencies that have a say in the regulation of U.S.A. gambling, these figures include the Department of Justice, the Federal Bureau of Investigation, the US Supreme Court, the House of Representatives, Congress, and even the President. All of whom communicate with one another and utilize the US constitution and precedent laws to determine the eligibility and legality of pending gambling legislation and regulations. At the state level, senators and congressmen in government positions lobby, direct, and discuss possible gaming legislation to either generate, permit, and regulate various legal forms of gaming entertainment in their state.

However, state governments often create sanctioned oversight boards such as Gaming Control Boards or Gaming Commissions to authorize, supervise and regulate legalized gambling activities within their state. Certain states in the USA may only have limited forms of legal gaming and therefore consolidate administrative power to existing commissions such as Lottery Commissions that are then tasked to regulate lotteries and limited forms of gambling such as charitable gaming in this case.

Forms of Legal Gambling in The United States

There are a variety of legal forms of gambling within the United States, however, these permitted venues are not uniform across state lines and players interested in engaging in these activities should check with local state laws to ensure lawful participation. As identified by the American Gaming Association the following forms of gaming entertainment are legal in the US: brick and mortar commercial casinos, tribal-run casinos, public and private poker rooms, bingo halls, various charitable gambling venues offering games such as raffles, pull-tabs, paddlewheel, punchboards, and casino nights, table games, on-track and off-track pari-mutuel wagering on horse racing, exotic wagering, bookmaking, daily fantasy sports tournaments, skill-based tournaments such as billiards, darts, and fishing, and lotteries.

Forms of Legal Online Gambling in The United States

Within the U.S.A. there are legal forms of online gambling that citizens may participate in, however again, the permissibility of online wagering is not equal across state borders as individual states hold the authority to allow or prohibit various types of online gambling for their state residents. With this being said, a number of US states have permitted the legalization of online gaming platforms through the use of iGaming services providing online casino, poker and lottery initiatives that are thriving. As of this writing, Delaware, New Jersey, and Nevada all have state-based online poker available, and both Delaware and New Jersey also offer state-regulated online casino gambling as well.

At this moment in time, individual states are not eligible to provide state-regulated sports betting online due to current federal legislation blocking such access. Regardless, nearly all USA residents may participate in legally licensed and regulated offshore online sports betting sites that remain a legal online avenue for USA players.

What Is The Legal U.S. Gambling Age?

Generally, gambling is legally accessible to individuals above the age of eighteen. However, every state has its own laws on the minimum legal age for gambling within their borders and often it can vary by game type. Normally, lottery gambling, charitable gambling, parimutuel wagering and bingo are available to young adults who are at least eighteen. Often times poker and casino gambling impose a requirement for individuals to be at least twenty-one in order to participate. These norms vary by state.

What Happens If I Violate A US Gambling Law?

Nearly all states criminalize gambling in some form and contain various penalties and punishments set for engaging in illegal forms of gambling. Violations of any US gambling laws, whether federal or state, can lead to imprisonment, hefty fines, and/or probation. Each violation case is different, and penalties vastly change based on the state or jurisdiction the violation took place in and circumstance. Imprisonment can vary based on a misdemeanor or felony offense in which case can result in up to a year in county or local jail for misdemeanors and a year or more in prison for felony offenses.

Criminal cases involving organized crime and professional gambling can result in up to a 10-year sentence in federal prison or more. Fines can vary on a state by state basis, generally, misdemeanor fines can range from $100 up to a $1,000 or more. Felony fees are relatively handled the same way and they can reach up to $20,000 or more. Fines can be separate punishments or in addition to jail or prison sentences. Probation sentences often ask offenders to serve 12 or more months either in a gambling addiction treatment facility or refraining from participating in gambling activities alongside with judge recommendations for community service or similar.

Is Illegal Gambling a Problem in the United States?

In the past, illegal gambling rings were run by threatening mobster figures who would often commit violent crimes against individuals and families of persons with unpaid debts. Today, the seedy dark figures of the past are no longer so prevalent but that is not to say that there are no underground gambling activities taking place in the US. In fact, several cases of violent threats and acts occur to this day due to gamblers placing wagers and falling into debt with the wrong type of individuals.

Illegal gaming remains a huge black-market business in the U.S. and every day individuals can place illicit wagers through bookies, backdoor casinos, and illegal online portals while operators, owners, and bookmakers take their cut of this lucrative business. No one is sure how much money is exactly wagered illegally but some estimate that the numbers are close to $88 billion a year. Other than the issue of states being unable to tax this money and legal venues losing money to illegal platforms, the greater issue of possible gambling addiction remains the most threating as addiction can lead to serious problems concerning an individual’s financial welfare, home-life, and possible crimes committed.

Which States Consider Gambling Illegal?

Gambling is wholeheartedly illegal in Utah and Hawaii, as they are well-known for their gaming prohibitions and strict anti-gambling laws. These two states have often reasoned that gambling would destroy their religious values, moral family structures, and harm their communities. Certain states that do not oppose gambling on moral grounds still limit gaming within their borders and only provide minimal gaming entertainment access; a move that often forces interested bettors into illegal gambling activities. One state in particular that engages in this type of limitations is Alaska, however, other states employ similar limitation tactics. These types of restrictions have driven the legal online gambling industry to gain momentum.

How Do I Know If I’m Gambling At An Illegal Destination?

Often a red flag for any gambler is the location of the said gaming site. Look around: is the setting of the business in a rundown location hidden from legal oversight? Do you have to enter through a special backdoor? Is the lighting poor, hygiene of the venue dissatisfactory, and do the patrons and staff give off a suspicious feeling? The one sure fire way to determine the legitimacy of any type of gambling business either offline or online is through their credentials. Legally sanctioned gambling businesses have no problem being transparent regarding their licensing, regulatory oversight and compliance certifications.

All licensing credentials should reflect the name of the agency or gaming commission that issues licensing for any given jurisdiction, and can easily be verified through the relevant regulatory body. If you find yourself in contact with a gambling business of any kind that acts defensive or is elusive when you attempt to question their credentials, you can speculate that their legitimacy is questionable. Illegitimate gambling businesses, which in turn are illegally operating, are usually focused on predatory acts, such as theft and fraud. We strongly caution against sharing any information with any gambling business that you are not sure is operating legally within the industry.

Who Do I Contact About Illegal Gambling Operations?

Once you have come in contact with an illegal gambling operation that attempted to entice you to wager on or participate in illicit activities, contact a lawyer, report the illegal operation at ic3.org, and follow up with filing a report with the FBI, local law enforcement, the American Gaming Associations Illegal Gambling Advisory Board, and/or Internal Revenue Criminal Investigation Department.

Help With Gambling Addiction In The United States

Federal Law Against Illegal Gambling Losses

Illegal Sports Betting

Federal Law Against Illegal Gambling Laws

How Offshore Operators – and Those Who Support Them – Break U.S. Law

For decades, state-regulated brick and mortar sportsbooks in Nevada offered the only legal sports betting in the U.S. However, with the advent of the internet, illegal bookies have taken advantage of lax or even non-existent laws in places like Antigua, Costa Rica, Latvia, and Panama to set up online sportsbooks that target American customers. These sportsbooks are illegal in the United States and prey on unsuspecting Americans, despite claims of regulation and licensure in their home countries. In the wake of the Supreme Court decision in Murphy v. NCAA and nearly half of the states legalizing sports betting, these unscrupulous operators continue to take advantage of the unsuspecting public.

Sports betting, like all other forms of gambling, is highly regulated at the state level. Each state in the country can decide if and to what extent it will permit gambling. Since the decision in Murphy v. NCAA, 22 states plus the District of Columbia have legalized sports betting. Each of these states have established rigorous licensing regimes to ensure game integrity and consumer safety. Sportsbooks and bookies that offer sports betting outside of these licensing regimes – whether in person or online – are illegal.

Federal law makes it a crime to participate in the business of illegal gambling. There are a variety of statutes that make it illegal to operate or participate in financial transactions related to an unlicensed sportsbook in the United States, including the Wire Act, the Illegal Gambling Business Act, the Travel Act, and the Unlawful Internet Gambling Enforcement Act.^[i] Beyond federal statutes aimed specifically at gambling, a variety of broader criminal laws targeting organized crime have also been the basis for prosecution of offshore gambling rings.^[ii]

The threat of federal prosecution is not hypothetical. Prosecutors have been successfully pursuing cases against offshore operators for two decades. The first ever prosecution of an offshore book came in 2000 against Jay Cohen, founder of the Antigua-based World Sports Exchange. A jury found Cohen guilty of several violations of the Wire Act, for which he was sentenced to two years in jail.^[iii] In another case, the federal government charged 57 individuals with operating an illegal gambling business, racketeering, and money laundering in connection with their Panama-based sportsbook.^[iv] The trials continued for many years, resulting in convictions, fines, and other sanctions.

Another high-profile case from the Southern District of New York illustrates the far-reaching impacts of illegal sports betting. In 2016, the U.S. Attorney charged and prosecuted 46 leaders of several organized crime families with everything from assault, extortion, and gun trafficking, to loansharking and illegal gambling.^[v] The sports betting charges stemmed from the defendants’ use of online, illegal sportsbooks based in the United States and abroad to enrich the crime families.

Federal prosecution is not limited to the operators themselves. The Department of Justice has warned that media outlets that accept advertising dollars from these illegal operators could be liable for aiding and abetting criminal activity.^[vi] Microsoft, Google, and Yahoo entered into a $31.5 million settlement with the federal government in relation to their promotion of illegal, offshore gambling in 2009.^[vii] The Sporting News, one of the oldest sporting outlets in the country, entered into a $7.2 million settlement with the Department of Justice to resolve accusations stemming from accepting advertising from offshore gaming outlets.^[viii] Even short of criminal prosecution, media outlets may be subject to seizure of funds or subpoenas as part of related prosecutions or investigations.

Federal Law Against Illegal Gambling Philippines

While federal law is abundantly clear on the illegality of such operations, these books and even the media, often claim it is not illegal for the consumer to use offshore sites. While it is true that no federal law targets bettors using offshore books, many states have laws that make using these books illegal. Many of the 28 states with no legalized sports betting expressly make it illegal for consumers to wager on sports in any form, including via offshore operations.^[ix] And several states that have legalized sports betting specify that consumers should only engage in such activity through a legal, regulated sportsbook. For example, it is illegal in Nevada and Michigan to place a wager with a sportsbook that is not authorized to operate in the state.^[x] It is also, of course, illegal for a sportsbook to operate without proper licensure and regulatory oversight in any state with legalized sports betting.

Beyond being illegal, these offshore operations also fail to provide any meaningful consumer protection. While legal, regulated sportsbooks uphold key principles of responsible gaming, protection of consumer funds, data privacy, and more, offshore books do nothing to protect their patrons. In fact, should a consumer find themselves at odds with their offshore bookie (not being able to withdraw their funds or disagreeing with how a bet was settled, for example), there is no one the consumer can turn to for help. Further, should the federal government initiate a proceeding against any of these offshore books, customers might lose their money on deposit with the book with little to no recourse. These illegal operators also avoid contributing state and local taxes to U.S. communities.

Offshore sportsbooks violate federal and state laws in targeting U.S.-based consumers. Worse yet, they take advantage of confusion and uncertainty to entice consumers to use their illegal sites. For many consumers, they only realize the dangers in using these sites when it is too late – when they have a complaint or a problem, but no recourse to resolve it. Only when all sectors of the sports betting ecosystem work together – the operators, the suppliers, the media, the regulators – can we ensure customers can easily find and use safe, legal, and regulated sports betting sites.

Citations

^[i] The Wire Act, 18 U.S.C. § 1084; Illegal Gambling Business Act, 18 U.S.C. § 1955; Travel Act, 18 U.S.C. § 1952, Unlawful Internet Gambling Enforcement Act, 31 U.S.C. §§ 5361–5366.

^[ii]E.g. Racketeer Influenced and Corrupt Organizations (RICO), 18 U.S.C. §§ 1961–1968 and 18 U.S.C. §§ 1956, 1957 (relating to money laundering).

^[iii]United States v. Cohen, 260 F.3d 68 (2d Cir. 2001); see alsoMan Jailed in 1st U.S. Online Gambling Conviction, Reuters, Aug. 11, 2000, https://archive.nytimes.com/www.nytimes.com/library/tech/00/08/biztech/articles/11gambling.html.

^[iv]Fifty-Seven Charged with Operating Illegal Online Sports Gaming Business, U.S. Dept. of Justice, Apr. 10, 2013, https://www.justice.gov/usao-wdok/pr/fifty-seven-charged-operating-illegal-online-sports-gaming-business.

^[v]Manhattan U.S. Attorney Charges 46 Leaders, Members, and Associates of Several Organized Crime Families of La Costa Nostra with Wide-Ranging Racketeering Charges, U.S. Dept. of Justices, Aug. 4, 2016, https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-charges-46-leaders-members-and-associates-several-organized-crime.

^[vi]See Letter from John G. Malcom, Deputy Assistant Att’y Gen. to Nat’l Ass’n of Broadcasters, June 11, 2003, available at commlawcenter.com/files/2014/02/NAB_letter-030611.pdf.

^[vii] Jason Ryan, Microsoft, Google, Yahoo to Pay $31.5M Over Illegal Gambling Ads, ABC News, Jan. 8, 2009, https://abcnews.go.com/Technology/FedCrimes/story?id=4029545&page=1.

^[viii] Matt Richtel, Sporting News Settles Case on Gambling Ads, N.Y. Times, Jan. 21, 2006, https://www.nytimes.com/2006/01/21/business/media/sporting-news-settles-case-on-gambling-ads.html.

^[ix]See, e.g., Ga. Code Ann. § 16-12-21; Tex. Penal Code § 47.02; Wis. Stat. Ann. § 945.02

^[x]See Nev. Rev. Stat. 465.093; Mich. Comp. L. § 750.310e.