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Online Sports Gambling - The Law and You

Straight Answers On the Legality of Sports Betting

When considering betting sports on the internet, it's not uncommon for a person to wonder whether they're breaking a local or state law. After all, most states, and even the federal government, have legislation about whether and how it's legal or not to gamble.


Who Regulates Sports Betting?

Until recently, the regulation of gambling in the US was left entirely to the discretion of the individual States. But the advent of online gambling created confusion about jurisdiction. After all, who runs the laws in cyberspace? Most current laws meant to apply to gambling in general were created long before the internet existed, and thus the application of those laws to online gambling is open to broad interpretation.


US Regulation of Sports Betting

"The most important question being asked about online gambling is: 'Is it legal to run a sports betting operation offshore and take action from clients in the United States?' The US government will argue it is not legal.

However, no bills have been passed to prevent such activity; and in recent years attempts to pass bills of this nature have failed," explains Chris Costigan, sports gambling analyst and president of Gambling911.com, the industry's premier sportsbook watchdog site.

Costigan continues on, "The Federal government has placed much of the responsibility of gambling legislation in the hands of individual states, some of which have considered legalizing online gambling (North Dakota voted on legalizing online poker within the state, but that bill failed to pass). Some states, like Illinois, have added legislation that strictly prohibits the advertising of online casinos. Only three states - California, Louisiana, and Nevada - strictly prohibit its citizens from betting beyond state borders. However, such laws are historically loosely enforced. Most states consider gambling violations misdemeanors with the vast majority focusing specifically on operators as opposed to the actual gamblers themselves."

To avoid breaking US law, most internet sportsbooks are located offshore in foreign countries and also house their computer servers there. (Click here to learn more about the Advantages of Online Sportsbooks)

To be clear, the US government has been attempting to pass legislation to deal specifically with the regulation of online gambling. However, because there are so many grey areas regarding who has authority over activities in cyberspace, these attempts have not been successful in passing and it's becoming clear that the US will not be able to effectively legislate online gambling. As Costigan and Gambling911.com point out, "2005 will be the first time in five years we will not see any proposed anti-gambling bills emerge in Washington."

Legal Issues: The Summary

The Wire Wager Act

The Wire Wager Act, in its most basic sense, prohibits the use of a wire transmission to foster a gambling pursuit. What does this mean? Your guess is as good as mine, and as good as the people who wrote the legislation. Some lawyers argue that what this act means is that any interstate use of the internet that is related to placing or receiving bets is illegal. However, other lawyers believe that this cannot be applied to internet betting due to both the extensive use of wireless internet services and also, due to some vagary in the language, the act may only apply to sports event betting and not other types of betting. Most importantly, the specific language of the Wire Wager Act says that it applies only to those participating in the business of betting or wagering. That limits its impact to only sportsbooks and casinos and means that it can in no way be used against the actual bettor.

April 2005: Two important rulings are handed down regarding online sports betting. Chris Costigan, sums them up as follows:

"Firstly, the World Trade Organization upheld its decision in favor of Antigua, a tiny island nation that claimed the United States stymied its lucrative online gambling industry. Antigua contended that many online gambling operators left its jurisdiction as a direct result of the United States crackdown on operators and advertising venues.

A more critical ruling involved the United Kingdom, which now allows gambling companies to take bets online from the UK. While England's stance on bookmaking is quite opposite of the United States, internet sports betting shops and online casinos were forced to operate offshore on nearby islands such as Gibraltar and the Isle of Man. The United Kingdom decision is viewed as a nod of approval by an industrial nation paving the way for internet gambling to thrive in a fully regulated environment, and the U.S. is most likely to recognize and respect its position."

So, Can an American Bet Sports Legally?

The simple answer is there is an explicit law against online betting in only three states - Nevada, California, and Louisiana. Even so, NO American citizen has ever been arrested for betting on the internet.

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