U.S. Gambling Law and Its Effect on American Players

The major piece of legislation that has had an impact on the online gambling industry as far as the players and the operators are concerned is the Unlawful Internet Gambling Enforcement Act, also known as the UIGEA, which has had the effect of making it unfeasible, in the determination of some of the operators, to recruit players who are located within the United States.

Some of the major companies who have been involved in this industry are publicly traded on exchanges such as the London Stock Exchange, and thus there were to be repercussions for operating in such a way that it might be considered illegal, so the lion's share of those companies who were involved in pitching U.S. business pulled out. This limited choices for U.S. players, but at the same time also presented opportunities for certain companies.

The Interstate Wire Act of 1961 is the piece of legislation that originally gave rise to the so-called "illegality" of online gambling, and there was a literal basis for it, in the respect that since the communication that was necessary to conduct some gaming activity theoretically took places over "wires" and also crossed over state and international lines, that it was a violation of the Act. Still, questions have always been brought up by online gambling interests.

It was relatively clear at the beginning that the Wire Act was something that was paying particular attention to the idea of sports betting, and communications that had the effect of "..........assisting in the placing of bets or wagers on any sporting event or contest." Of course, the technology (the internet) was also not something that had been contemplated at the time of the Act's passage.

Last December, an opinion came down from the U.S. Department of Justice that addressed the Wire Act to the benefit of online gambling enthusiasts and in particular poker players. The conclusion was that "Interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act." In other words, it was confirmed that there was a specific interest in sport betting, to the exception of other forms of gambling.

Also, according to an opinion that was rendered by an assistant Attorney General named Ronald Welch, the opinion offered some clarification for state governments who may want to allow or conduct internet gaming within its borders on activities that did not involve sports betting, and many states have certainly begun to undertake measures that would facilitate a legalization for state residents. The Poker Players Alliance, which applauded the DOJ ruling, chimed in with its own caution: that state-by-state licensing would limit player choices in many ways, and that a strong federal regulation was probably needed in its place.

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