While most US states have flourishing land-based gambling scenes, we can’t say the same for the online gambling market. Internet gambling has only recently become the center of many discussions and legislative sessions, with each state deciding whether or not to legalize it.
Several US states, like New Jersey, Pennsylvania, Michigan, Nevada, Delaware, Connecticut, and West Virginia, already have prolific online gambling markets. Behind every legalized iGaming landscape is a solid legal layout with regulators controlling every aspect.
Below, we’ll introduce the US gambling laws and authorities that ensure all online gambling activities run smoothly. Use the links below to jump to the section you are interested in:
Federal Gambling Laws
Although US online gambling is a young industry, its laws have been around for several decades. Below, we’ll cover the three most important federal regulations that still shape the growing iGaming market.
Federal Wire Act
The Interstate Wire Act was introduced in 1961 by the Kennedy Administration to fight organized crime. More specifically, it prohibits interstate transmissions of payments and information regarding sports betting. Despite being signed over six decades ago, the Federal Wire Act still influences the legalization of online gambling.
In 2011, the US DOJ released a re-interpretation, stating that the law only applies to sports betting, creating room for other gambling forms to cross state lines. However, in 2018, the DOJ revised the 2011 opinion, explaining that it refers to all gambling forms, putting online lottery and poker in danger.
Many entities and stakeholders, including several state lottery commissions, have appealed the ruling and filed complaints against the DOJ. The battle is ongoing and could go to the Supreme Court.
UIGEA
The 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) also heavily influenced the US online gambling industry. The act was added at the last minute before the Congress adjourned for the 2006 elections, meaning no one from the committee saw the final draft before the bill was passed.
UIGEA prohibits gambling companies from receiving money transactions from people who place wagers through the internet but doesn’t criminalize online gambling. On top of that, the act excludes fantasy sports, skill games, lotteries, and legal interstate and intertribal gaming.
The act also ended the flourishing online poker scene in the US when NY state officials used UIGEA to stop real-money online poker. This move put bigger events in motion, leading to the day known as “Black Friday.” On April 15, 2011, the US brought a criminal case against three of the biggest online poker companies, effectively ending this booming industry in America.
However, many states saw this as an opportunity to introduce online casino games (slots, blackjack, and poker), even though the payment processors can’t operate over state lines. At the moment, only a handful of states have legalized online casino games and poker.
PASPA
The 1992 Professional and Amateur Sports Protection Act (PASPA) was a law that criminalized sports betting nationwide, except in a few states (Nevada, Oregon, Montana, and Delaware). While the 1961 Wire Act prohibited sports wagering-related money transactions, PASPA took it a step further, preventing the states from accepting single-game sports bets in-person or online.
However, the Supreme Court overturned the act in 2018, as it violated the 10th Amendment of the US Constitution, which gave states full power to modify gambling laws. New Jersey was the first state to legalize online gambling, followed by over a dozen others.
State Gambling Laws
The states’ authority over online gambling laws has created a unique and complex situation on a national level. For instance, Utah and Hawaii explicitly ban all gambling forms, while New Jersey and Pennsylvania are gambling powerhouses featuring online and land-based gaming options.
The wave of online gambling laws and regulations has taken over the US, and more states have begun to understand the potential and benefits of a legal iGaming market. Although it’s doubtful all US states will introduce online gambling, the overall industry steadily evolves.
Regulatory Online Gambling Authorities in the US
Now that we’ve extensively covered federal gambling laws, it’s time to look at individual states that have already legalized some (or all) forms of online gambling. As explained, each state has the power to change its gambling legislation and bring new opportunities into the fold.
Every US state has a body of authority regulating all online and land-based gambling activities. These authorities oversee the entire industry, license new operators, and create a safe and fair gambling environment. They can also penalize anyone who breaks the law — individuals or gambling companies.
The table below displays all US states that have legalized some form of online gambling and their gambling regulators that ensure everything runs smoothly:
Offshore Gambling Regulators
As you can see from the table, not many US states legalize online casinos. As a result, US residents looking for casino action turn to offshore operators offering fantastic online gambling opportunities.
In this case, “offshore” refers to internationally licensed online casinos and sports betting sites that cater to US residents. Although many regulatory authorities exist, two of them are usually behind the most popular gambling platforms:
- Malta Gaming Authority — Founded in 2001, the MGA regulates most gambling forms in the country, including land-based and online operators. Many international operators base their headquarters in Malta because of its comprehensive laws and low taxes. Despite being one of the strictest regulators, the MGA offers a sustainable business opportunity for gambling companies worldwide.
- Curacao eGaming — Companies looking to branch into online gambling often turn to Curacao eGaming. Currently, over 450 online casinos and betting sites hold the country’s license, making it one of the most popular regulators in the world. According to Curacao laws, operators don’t have to pay revenue taxes as long as it’s internationally sourced. On top of that, the application process is inexpensive and quick, making the Curacao eGaming license perfect for startups and small gambling operators.
Conclusion
Despite some states’ refusal to legalize online gambling, the US iGaming industry is flourishing. The regulatory authorities have created a safe layout where players can enjoy the most exciting casino games and bet on their favorite sports. However, the number of states permitting online gambling will likely continue to grow as officials set aside their previous aversion and consider online gambling as an excellent revenue source.
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