Legality of Internet Gambling in the US

Internet wagering in the US has had a long and storied history, even though the industry has been around for less than two decades. In 2006, the Unlawful Internet Gambling Enforcement Act became law. This law restricted use of payment systems for online gamblers from the US. At that time, many online casinos blocked Americans rather than risking getting in trouble with the US federal government.

That didn’t exactly stop Americans from gambling online, or casinos from advertising to them. Casinos and individuals developed work-arounds that allowed the practice to continue in an American “shadow” online gaming community.
However, on July 28, a bill to legalize online gambling, sponsored by Senator Robert Menendez (D-NJ) was passed out of the House Financial Service Committee, allowing the US Treasury Department to regulate and license internet betting. A companion bill would allow the Internal Revenue Service to tax the businesses and the winnings of gamblers. A press release from the House Financial Services Committee said that the legislation would “enable Americans to bet online and put an end to an inappropriate interference with their personal freedom.”

The next step is for the bill to go before the full House of Representatives, but many fear that won’t happen with important mid-term elections coming up. Bottom line is that there is no way to predict when or how all the i’s will be dotted and the t’s crossed in the move to fully legalize online betting by Americans. Momentum is clearly shifting toward acceptance and legalization, but in today’s political climate, who can say when anything will be finally signed into law?

So what does an American do if they want to gamble online?
What most people do is simply try their credit card at the casino where they want to play. About three quarters of the time, it will go through. At many of the casinos where your credit card will not be accepted, there are alternate methods for gaining access, such as purchase of prepaid cards. There are also “e-wallet” services” that accept credit cards. The e-wallet funds are then used in the online casinos. Some e-wallet services also accept transfers from bank accounts.

In the US, there are no crackdowns on people betting online. Although several states have passed laws for online betting, those laws generally prohibit accepting bets, not placing them. In other words, the laws are aimed at the casinos and not the players. With the push for fully legalizing online gambling in the US gaining momentum, it is highly unlikely that you would ever be arrested for using an online casino in the US.

If you live in another country, however, you should make doubly sure that you know the laws where you live. For example, in August 2010, South Africa made it illegal to gamble online or to operate an online betting business there. This appears to be a fairly serious crackdown, too. If you’re a South African, educate yourself before you risk getting into legal trouble for online gambling.
Most of the world has an openness to online betting, and it looks like eventually the US will formally join the rest of the world in this. In the meantime, Americans will continue to enjoy online betting, and will likely breathe easier due to the legislative progress being made in Congress.

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