Online gambling in the USA has been on legal ground that is open to various interpretations ever since an appeals court ruling in 2002. In November of that year, the United States Court of Appeals for the Fifth Circuit ruled that the Federal Wire Act prohibited electronic transmission of sports betting information across telecommunications lines. However, it also affirmed a lower court ruling that the Wire Act does not prohibit Internet gambling on games of chance. This spared USA online casinos from having to stop operations, but only temporarily.
In 2006, before adjourning for midterm elections, both houses of Congress passed an amendment to an unrelated bill, the SAFE Port Act, that made transactions from banks or similar institutions to online gambling sites illegal. Signed into law in October 2006 by President George W. Bush, the law had the effect of causing numerous online gambling operators to suspend real money gambling for US customers.
Legalizing online gambling in the US flat out has been a constant battle ever since. Within the US, some states have seriously considered passing intrastate gambling online laws, which would permit online gambling only within those states. In November 2010, New Jersey became the first state to pass an intrastate online gambling bill through both houses of its state legislature. As of this writing, it awaits the signature of New Jersey governor Chris Christie.
New Jersey’s bill is unique among state online or internet gambling laws not only because it is the first to pass, but because it allows gamblers in other countries, but not in other states of the US, to participate in the state’s online gambling sites. Internet gambling operators in New Jersey must be licensed Atlantic City casino operators, and all equipment used for conducting Internet gaming must be located in casinos in Atlantic City or at other secure Atlantic City locations.
What does New Jersey’s law mean for online casino USA operations? At the moment, not much. However, it does send the strong signal that clarification of the legality of gambling online in the US is on many people’s minds. Online gambling enthusiasts in the USA, who have had to undertake rather labyrinthine measures to ensure they are handling money legally, are strong proponents of national legislation, as are some Congressional representatives, and many land-based casinos.
The arguments for making online gambling clearly legal in the US are also bolstered by the enormous tax revenues that could be realized by such legislation – a very appealing source of revenue in an economy where the federal government is currently running enormous deficits.
Currently, USA online casino enthusiasts concerned about the numerous international sites that have shut themselves off to players from the US have to use independent money transfer businesses to fund their online gaming. The most prominent online casinos have clear directions on how to do this, and many of them are open to gamblers in the US.
Players themselves have little to fear from US online gambling laws (or lack thereof). U.S. Attorneys have admitted that placing wagers online is not against federal law. It may sometimes run afoul of state laws, but even in those cases prosecutions are basically never carried out.