United States Gambling Laws
Lets take a look at every United States federal law that relates to online gambling. It’s important to remember that there has never been a law that makes it illegal for an individual to place a bet. The following laws have specifically targeted the organizations accepting wagers and not the customers themselves. Here is a brief summary of the Federal Wire Act, PASPA, and UIGEA.
1961: Federal Wire Act
The Federal Wire Act put into law on September 13th, 1961 made it illegal to accept bets across state lines. It was part of a series of anti-racketeering laws aimed to prevent organized crime operations from profiting off match fixing sports events. The Federal Wire Act prohibited the transmission of betting information across state lines via telegram or telephone. This made it illegal for a US-based bookmaker to accept a bet from an American citizen who lived in a different state. Congress emphasized that this law did not target the individuals who were placing a bet. The Federal Wire Act does not make it illegal to use offshore sportsbooks since they do not operate in the United States.
The Professional and Amateur Sports Protection Act (PASPA) was a 1992 federal law that outlawed sports betting across the United States. States that were already operating licensed sports gambling services were exempt. Congress determined that the Federal Wire Act was not sufficient to preventing sports betting from crossing state lines.
The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibits American financial institutions from knowingly accepting payments from online gambling sites. This bill broadened the Federal Wire Act’s definition of bet or wager to include any game of chance. It’s purpose was to target online poker which had been rising in popularity since 2004. The inception of the UIGEA was controversial as it snuck through Congress attached to the SAFE Port Act; a piece of unrelated anti-terrorism legislation that was guaranteed to pass. This new law made it illegal for online betting services to knowingly accept funds from another person for unlawful Internet gambling. It gave the federal government authority to block payments being sent to unlicensed sports books. It also allowed law enforcement to demand Internet service providers immediately terminate web hosting for unlawful gambling sites. The UIGEA eliminated fraudulent transactions which were commonly tied to online sports books. It resulted in casino operators switching to more secure payment processors. This ended up benefitting customers by providing them with more secure ways to place bets at the cost of limited payment methods.