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The Department of Justice contends that all forms of traditional Internet gambling are illegal under United States federal law, as is the marketing, promotion, or advertising thereof.
Indeed, some forms of online gambling, like sports betting, are specifically prohibited by federal statutes. Other gaming activity may or may not be legal, depending on the circumstances.
The courts have agreed that the Wire Act only restricts sports betting, however the Office of the Attorney General has issued conflicting opinions on the matter.
Various other federal laws may apply to certain online gambling activities, such as the Illegal Gambling Business Act, the Wagering Paraphernalia Act, and the Travel Act, however, their applicability depends substantially on the type of gaming activity, as well as the state law where the activity is occurring.
Moreover, other forms of gaming-related entertainment may be exempt from traditional gambling laws, such as skill gaming, tournaments, sweepstakes, fantasy sports, and contests.
However, those activities implicate other potential regulations, primarily at the state level. Accordingly, at least as far as federal law is concerned, the operation of U.
On October 13, , former President Bush signed the Unlawful Internet Gambling Enforcement Act UIGEA , which restricts the acceptance of certain financial transactions pertaining to illegal online gambling, and imposes requirements on banks and other financial service providers to identify and block illegal financial transactions.
The scope of the UIGEA remains largely untested in the courts, despite the fact that the law has been around for over a decade.
The administrative regulations promulgated by the Treasury Department provide the opportunity for certain online gaming operations to continue using U.
Based on the plain language of the UIGEA, only financial transactions relating to wagers that are illegal where they are made are prohibited by the law.
That requires an evaluation of the current state of gambling law in the location where the betting transaction is initiated. Accordingly, some gambling-related financial transactions may be illegal under the UIGEA, while others may not.
Most online poker operations continued to serve U. These indictments resulted in the online poker industry effectively cutting off the U.
The withdrawal of the large poker sites created some opportunity for other companies willing to take on a degree of legal risk to serve U.
However, enhanced banking and financial compliance obligations caused difficulty in receiving player deposits from the U. The development of bitcoin alleviated that issue, for sites that accepted this alternative currency, however legal risks remained.
Offshore bitcoin gaming sites continue to operate, although criminal charges have been brought against some U.
Aside from federal law, some individual states have passed their own online gambling and skill gaming laws.
Most statutes focus on prohibiting the operation of an online gambling business, while a few also prohibit the act of placing a bet online.
Very few prosecutions have occurred under state law, and thus the validity and constitutionality of these statutes have not been tested in the courts, as applied to website operations.
Other states have legalized fantasy sports betting, while still others have prohibited such activity. With more and more states passing laws directed to online gaming activity, the result has been an increasingly complex state of affairs.
Some forms of Internet gambling may, for example, be legal in certain states while completely prohibited or criminalized in others.
Since some federal laws like the Illegal Gambling Business Act and the UIGEA rely on the legality of gambling activity at the state level, any attempt to determine the legality of a particular online gambling operation in the United States can result in complex evaluation and analysis.
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