Is Online Gambling Legal?

The question of online gambling legality h as been on the minds of millions upon millions of online gamblers across the world. With ever-changing legislation and a lot of buzz, it's hard to be able to tell fiction from fact. The truth is that there is no clear-cut answer to the question. Legality in online gambling depends on many factors, the biggest one being location. Not every jurisdiction outlaws gambling. Therefore, it's important to know the laws in your area to know whether online gambling is legal in your district. This article will help break down the questions you need to ask and will help you understand basic known legislation but we are not lawyers and it is advised to seek the advice of a legal professional to fully understand whether or not, and in what way, gambling is legal where you live.

A Bit of History - The Interstate Wire Act of 1961

The issue of online gambling legality comes stems from the Interstate Wire Act of 1961. This bill was passed to outlaw sports betting wagers being placed over the wire (i.e., the telephone). This was extended by the US Justice Department in later years to include online gambling. However, the legislation has never been made formal and the US Justice Department has made clear that its intentions are to stop advertisers and not players.

Can The Government Prosecute Me for Gambling Online?

The basic answer to this question is no. There isn't a federal law that prohibits playing online or placing wagers online. The issue to be wary of is state law but prosecution is extremely rare. One of the only known incidents where an online gambler was arrested was in the case of Jeffrey Trauman, a resident of North Dakota who wagered over $100,000 in sports bets and paid a fine in roughly the sum of $500. The main laws concerning online gambling are not aimed towards the consumer (i.e., the player) but they aim to shut down any financial transaction between the operator and US financial institutions.

In the US - Where Is It Not to Gamble Online?

The following states expressly prohibit online gambling: Illinois, Indiana, Louisiana, Montana, Nevada, Oregon, South Dakota, Washington, and Wisconsin.

However, there is no federal law prohibiting online gambling.

Understanding Some Current Legislation

Internet Gambling Enforcement Act (UIGEA)
The UIGEA was a law instated in 2006 in the United States that bans transferring funds from any US financial institution (i.e., bank, credit card company, etc.,) to an online gambling company. There are certain types of gambling are not included in the UIGEA prohibition including horse racing and online lotteries and fantasy league betting.
Many people were up in arms about the UIGEA being very unclear and widespread misunderstanding of the bill lead to a lot of online casinos closing their doors. The understanding behind this was simply to err on the side of caution. Many online casinos still accepted US players and since 2006, many new online casinos have opened that accept players from the US.

Online Gambling Prohibitions Outside the United States

The Question of Legal Online Gambling in Europe

Almost all classic casino table games were invented in Europe. Europe has a very rich casino culture and until recently in history it was only enjoyed by the uber-rich and aristocratic.

The EU has a Free Trade agreement that ostensibly allows offline gambling and the casino/gambling sector is a thriving one for both locals and tourists alike. There is a very strong gambling culture in Europe and trade laws make it so no one state within the EU holds a monopoly in this very lucrative industry.

Around 10 members of the EU have banned online gambling on an individual member-state level. As not all EU member states permit offline gambling, those that outlaw it typically outlaw online gambling as well. However, many EU member countries that permit offline gambling have outlawed online gambling in an effort to protect offline gambling that is predominantly controlled by the government. In short, they want to keep the money inside the state-controlled gambling sector. Many people find this to be an infringement on their personal rights and find it to be highly undemocratic.

In Germany, since January 2008, online gambling has been banned however state-run lotteries (online) and offline casinos are permitted. Ironically enough, in one German state, they've interpreted the law to ban the state-run internet lottery - somewhat of an unanticipated byproduct of the law. In recent years, France has enacted similar legislation.

These anti-gambling laws are an issue within the EU and the European Commission is currently being challenged as these laws symbolize a double standard that is a direct violation of the EU Constitution. This struggle has resulted in France opening up its markets to foreign competition that is licensed and regulated in the casino industry.

Online Gambling and the Law in Australia, Canada and the UK

Australia: In Australia, online gambling is not illegal. Players are technically not outlawed from gambling online. What is illegal is for gambling operators to offer gambling services to Australians that is not respectful of Australian law. There are countless online gambling providers that do offer their services to Australians and are seemingly not worried about any potential consequences. To date there have been no such prosecutions.

UK: It is legal for UK players to gamble online. The UK Gambling Act of 2005 was set forth to protect players and requires that gambling operators who offer their services to UK players must be licensed within certain jurisdictions recognized by the British government. Therefore, (similar to the rest of the world) the onus is on the casino operator, not on the player.

Canada: There is currently on law in Canada that prohibits online gambling. It is not legal to host or run an online casino in Canada. Interestingly enough, Cryptologic, one of the largest gambling software companies in the world, is Canadian. In Canada, individual provinces determine the laws pertaining to online gambling and no one province has outlawed online gambling.

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