USA Online Gambling Laws in 2019

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usa gambling laws

The aim of this review is to bring the USA gambling legislation closer to the potential online gamblers as well as to clear out any uncertainties they might have about the online gambling in the USA.

Although the Americans are crazy about all kinds of gambling, which makes them frequent online casino visitors, their enthusiasm for gambling has been curbed by rather strict gambling laws that date back to the middle of the previous century. So It may be a good idea to go back in time a little bit and take a look.

The Short History of the US Gambling Laws and Regulations

It all started in 1961. with the so-called Wire Act. This act prohibits all bets and wagers that concern sports events and manifestations and that are transferred by the “wire communication facility”. It also proclaims that all who conduct such an activity should be fined accordingly, or even imprisoned, or both.

The UIGEA, Unlawful Internet Gambling Enforcement Act is related to the Wire act since its original version suggested expanding the scope of “the wire communication facility” to the mobile networks and the Internet.

Besides imposing restrictions on mobile networks and the Internet, the original version also proposed that any game related to chance should be considered as betting and gambling. This would include the lottery games, for instance. However, this bill’s edge was a little trimmed off, so the final, more favorable version of the UIGEA was passed in the Congress in September 2006. and turned into a law by President Bush signing it in October the same year.

The imminent consequences of passing this law were disastrous for the US online gambling market. Namely, most of the major online gambling sites withdrew from the market expressly while on the other hand, their offshore peers grabbed the opportunity and offered a warm welcome to the US players.

Some of the poker playing sites survived the initial hit only to be completely crushed by the Department of Justice action conducted in April 2011 when the major online poker sites were shut down. This definitely put an end to a “cat-mouse” game that was going on since the UIGEA appeared in 2006. This day is referred to as “Black Friday” in the online gambling community since the entire scene of poker-playing sites in America literally vanished that day.

However, this event had a silver lining that appeared later that year. In September 2011. on the request of the state of New York, It was ruled that the Wire Act doesn’t apply to the State Lottery since this is not a kind of a sports event. This incited some hope that the path to the legalization of online gambling was paved.

Another huge step towards legalizing online gambling in America happened when the Daily Fantasy Sports became a legal undertaking in 2015. This happened after an incident that shook this profitable branch of online gambling. The DSF offer their players to gather their own team of real players and compete against other teams in various sports events.

What allegedly happened was that the employee of a famous DSF site abused confidential information about a game thus enabling his colleague to earn $350000 on the rival site. All of this motivated authorities to make some kind of legislative frame for this market.

What’s the Current Situation in the US States?

Delaware was the pioneer state in legalizing online gambling in 2012. The market opened in 2013 with sites that offered various table games such as the Blackjack, as well as online slots and Video poker games. Although the online gambling market is relatively small as the state itself it managed to gain a $3 million profit in 2016. As far as the sports betting is concerned Delaware was the first to offer it to players, promptly nicknamed The First State. The first bet was placed in summer 2018.

They also have a peer-to-peer online poker in Delaware but this isn’t a profitable online gambling market due to the low participation rate.

The online gambling law was passed in the state of New Jersey in 2013. giving the opportunity to the Atlantic City casinos to gain online gambling licenses and become hosts to various online gambling sites. New Jersey holds a specific record in the profit from online gambling and that is $196.7 million dollars achieved in 2016, only to increase it by 25% in 2017.

New Jersey collects extremely large revenue from the sports betting. New Jersey can offer gamblers 9 sportsbooks and an equal number of online betting apps,  also available on mobile devices. This flourishing gambling scene brought over $9 million profit in bets in August 2018. only to soar up to the total of $208 million with the start of the football season in September.

States That Offer Legal Online Poker

New Jersey started issuing the licenses for online poker  at the very opening of the market in 2013

Although the total online gambling profit continues to grow in the state of New Jersey, online poker takes a small part in it with approximately $2 million a month or 10%This is expected to change soon though, since the New Jersey agreed to start sharing online poker scene with Delaware and Nevada

Nevada has issued the license for online poker sites only. This happened in April 2013, with launching the first online poker site. However, it didn’t last long and shut down in 2014 leaving just two similar sites on the market

Who’s Next on the List of Legal Online Gambling States?

Although they took several different legislative options into consideration, nothing related to the legalization of online gambling hasn’t happened yet in the state of California. The DSF law was close to passing, but the Senate turned this bill down. The similar thing happened to the Online Poker law in 2016. when the California gambling community, intimidated by competition, failed to reach an agreement. It seems that there isn’t going to be any action taken in 2018.

Illinois is a state that was very close to passing the online gambling law at one point in 2017. However, nothing happened because it seems that the legislative bodies are in some kind of a frozen conflict about this issue.

The same situation with passing the online gambling bill occurs in New York state. Whenever a bill passes the Senate, it gets stuck in the Assembly.

What the Future Holds?

2019 may be the year of the next notable expansion of online betting in the States. Since the mid-term elections take place in November 2018. there is a small chance of passing any gambling-related laws. This may be one of the reasons why 2019 may become crucial for widespread online gambling legalization. Other reasons may be

    • Over the year 2019. a majority of states will use the legit sports betting as a stepping stone for further legalization of online gambling.
    • States that have not legalized the online gambling are going to wish for the amazing profit like the state of New Jersey makes out of online gambling.
    • They would go for legalizing the whole package offered on online gambling market including the Daily Fantasy Sports and lottery
  • The states that want to pass the online gambling law would probably take their time in completing a bill that would be acceptable for both legislative bodies and online casinos

Conclusion

Although the making of foundation and some legal frame for online gambling in America have proved to be a painstaking process so far, there is a glimpse of hope that the future will be brighter for this extremely profitable market. The intention of UIGEA law was to banish the offshore gambling sites from the States and prevent some shady business as well as to punish those who made currency transactions to these areas. What the law achieved instead was completely counterproductive because it opened the door and invited the shady online casinos in.

Let’s leave the UIGEA aside for now and try to predict what will happen next. Numerous American states like Delaware and New Jersey have made important steps toward the legalization of the entire online gambling market by making online poker and sports betting legit. On the other hand, many states have to overcome standstill positions their bills are in currently by finding a mutual agreement of all parties involved.

Until that happens offshore online casinos will act as generous hosts to a vast number of American players.

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