The Legality and Regulation of Online Gambling

Online Gambling

Online Gambling is a form of gambling that involves placing bets via the internet. It is a rapidly growing industry and includes all kinds of gambling activities such as sports wagering, fantasy sports, online lottery tickets and casino games like poker, roulette and slots.

The legality of Online Gambling is largely a matter of state law. Congress has attempted to regulate the gambling sector by introducing bills that would license and regulate Internet gambling.

Constitutional Issues:

Federal prosecutors have attacked online gambling legislation on a variety of constitutional grounds, including the Commerce Clause, the First Amendment’s guarantee of free speech and the Due Process Clause. However, these arguments have enjoyed limited success.

UIGEA (Unlawful Internet Gambling Enforcement Act):

The Unlawful Internet Gambling Enforcement Act (UIGEA) was enacted in 2006 and imposes a criminal penalty on banks and credit card companies that transfer Americans’ funds to online casinos. This law is intended to prevent casual gamblers from using their credit cards or bank accounts to fund online gambling.

Foreign Casinos & Payment Processors:

A number of companies operate offshore casinos and payment processors, some in countries such as Costa Rica or Panama. The problem is that these companies are not regulated in the United States and do not disclose how they make money.

Some states have prohibited online gambling, but others have not. In addition, a number of countries, including the European Union and the United States, have passed laws prohibiting or restricting online gambling. Despite these restrictions, the majority of online gambling continues to be conducted legally.