Internet Gambling Laws – US, UK and the World

Legal minds turned to Internet gambling laws as a specialty when the industry went beyond growth and exploded into the public mind. “The law surrounding Internet gambling in the United States has been murky, to say the least,” according to Lawrence G. Walters, one of the attorneys working with gameattorneys.com.

In contrast, Internet gambling laws in the U.K. have made the lives of providers and players a bit easier. The passage of the Gambling Act of 2005 has basically legalized and regulated online play in the U.K.

With the objectives of keeping gambling from promoting “crime or disorder” the U.K. act attempts to keep gambling fair, in addition to protecting younger citizens and others who may be victimized by gambling operation. Unlike the United States, which still clings to the 1961 Wire Wager Act, the U.K. significantly relaxed regulations that are decades old. A gambling commission was established to enforce the code and license operators.

A Whole Other Country

According to Walters and many other observers of the Internet gambling laws scene, the United States Department of Justice continues to view all gambling on the Internet as illegal under the Wire Act. But there are details in the federal law that defy attempts to throw a blanket over all online gambling.

The Wire Wager Act forms the basis for federal action on Internet gambling laws in the United States. The law was meant to complement and support laws in the various states, focusing primarily on “being engaged in the business of betting or wagering” using wire communication to place bets or wagers on sporting events or similar contests. The law also comments on receiving money or credit that results from such a wager. The keys are “business,” “money or credit” and “wire communication facility.”

But as many attorneys and proponents of fair Internet gambling laws emphasize, the federal law does not specifically address other forms of gambling. This has left the law open to interpretation when it comes to online casinos specifically and using the World Wide Web to play online games.

October 13, 2006 is a crucial date in the controversy surrounding the legalization of gambling. For anyone wishing to understand Internet gambling laws, the federal law passed on that day is essential knowledge. President George W. Bush signed the Unlawful Internet Gambling Enforcement Act (UIGEA), which is intended to limit some “financial transactions” used for online gambling.

But even if current federal gambling laws can clearly define something as simple as a legal gambling age, the newer UIGEA has not settled all the dust raised around the issue of online gambling. Attorneys such as Walters (and many others) have pointed out that the UIGEA seems to refer only to financial transactions and wagers that are illegal where the wager or transaction is made. Some wagers may be legal while others may not be legal. It’s as simple as that.

The UIGEA had some effect on Internet gambling, in that many successful companies got out of the business, at least in the United States. In fact, with the passage of the law in 2006, most U.S. online players found they could not play at an online casino or poker room, for a short time. Many of the gambling providers found ways to establish offices and servers outside of the U.S. so that could invite United States players back in.

Break Time

It’s now time to stop, take a deep breath and turn to Internet gambling laws in the various states. Some have passed their own rules and regulations (before and after UIGEA). In a few states, companies cannot operate an online gambling business. In other states it is illegal for an individual to place a bet using the Web. Some legal experts argue that these individual-state rules are unconstitutional since commerce across state lines should only be regulated by federal law, not state law. Commercial online gambling businesses don’t operate in the United States, however. If you want to visit their “home offices” you may have to travel to Malta, Gibraltar or Curacoa.

The 2005 U.K. law generally allows remote sites such as these. The rules are not so relaxed in the U.S. However, a recent appellate court ruling in the U.S. states that, in at least one case, an Web-based gambling site did not violate states laws. Most legal minds urge gamblers and others interested in the issue to stay tuned.

Some have given their attention to finding benefits of legalized gambling, noting that this huge industry might be a key to economic recovery in the United States. At the heart of their argument are examples such as established lotteries run by various states, in addition to the government revenues that flow in to state coffers from riverboats and land-based casinos.

Part of this effort rests on the shoulders of more than 100 legal representatives working for common sense in Internet gambling laws. This hoard of attorneys has the task of trying to keep the World Wide Web/Internet free from government intervention.

Bob Ciaffone is considered one of the experts on the subject of gambling and poker in general, and on the transition to online gambling. He suggests that any regulation of Web-based gambling should reduce competition from outside the U.S., so that the citizens of the U.S. would benefit in legal gambling states. His detailed plan would parallel the U.K. situation since that country passed its 2005 rules. Ciaffone also strongly urges U.S. lawmakers to keep Internet gambling laws separate from the 40-year-old Wire Act, which was passed to control illegal gambling over the telephone.

In essence, Ciaffone writes that the UIGEA attempted to do the right thing, but does it in all the wrong ways. The restrictions have severely handicapped what could be a great revenue source with proper regulation, according to Ciaffone.

Consider a statement on the UIGEA from the most-recognizable poker player in the world, Doyle Brunson. Though is comments apply to his favorite game of poker, they can easily relate to all Internet gambling laws. He said, in essence, that his company received good legal advice that indicates Internet poker is not “expressly” illegal. He encourages U.S. players to learn the laws of their own state.

Online Casino Gambling: A Global Phenomenon

If you check to see where the headquarters of the online casino gambling establishments that you like to visit are located, you’ll discover that a great percentage of them are based in the Caribbean (there and Gibraltar) — on the islands of Antigua and Barbuda, specifically. But as of late, a global pool of lawmakers and online casino gambling detractors, including the WTO (World Trade Organization) itself are trying to get these establishments shut down.

Fortunately for us players, the boom in online casino gambling has a life of its own — one that will not so easy be quashed. In fact, a panel investigating the dispute ruled that the U.S. was in violation of its own financial regulations when it gets in the way of American financial institutions engaging in transactions with Antigua-Barbuda online casinos. Score one for online casino gambling.

Actually, score more than that. Numerous countries are starting to face facts about the lucrative business of online casino gambling and finding ways for their local economies to capitalize on the craze. Not only does online casino gambling provide to the local communities that license and regulate them enormous sums of money in the form of tax revenues, but the online casino gambling industry also fosters huge job growth in whatever geographical areas it touches. Consider Antigua-Barbuda, where 30% of the residents are employed by online casino gambling establishments.

It is surely with incentives like those in mind that Prime Minister Tony Blair is trying to enact new legislation in the U.K. that will likely encourage more casinos to be built and a rise in casino gambling throughout the country. Supported by 53% of British voters polled, the new Bill if enacted will, among other things, remove all slot machines from around 6,000 different places and allow them to be placed together in new casinos with extended hours of operation. This legislation may even coax existing online casinos to move their bases of operations to Britain. Many observers and analysts believe this will inevitably lead to other similarly supportive measures aimed at online casino gambling as well.

Meanwhile, the French reportedly gamble 2 times more and for 3 times longer than their British counterparts. France’s citizens have been enjoying online casino gambling for years, especially since a loophole in European Union policy that heavily restricts land-based casino gambling (essentially requiring any French citizen who wishes to gamble to do so exclusively in state-run operations) has no bearing on online casino gambling, practically ensuring the industry a steady stream of eager participants. In fact, many believe that the popularity of online casino gambling is responsible for the skyrocketing demand for high-speed, broadband internet service.

The Australian government is getting into the action as well, granting an online casino gambling site a license to open a customer service center in the state of Tasmania. Recruiting has already begun, and an estimated 300 jobs will be created in the high-unemployment area.

A growing interest in online casino gambling in Asia has led to one of China’s most popular pastimes – the 4,000-year-old card game Mahjong – being offered as a multiplayer online casino game. Approximately 45% of Chinese people polled report that they play Mahjong regularly for money and whether China permits online casino gambling or not, there will be no shortage of players worldwide flocking to any site that offers the game.

Recently a campaign has been put into motion to legalize online casino gambling in Japan as well, supported by the country’s Liberal Democratic Party, currently in power. Several departments in the government have been brought in to figure out how to make this work for Japan’s economy, and it is expected that online casino gambling operators may be invited to contribute to the talks in due time.

And online casino gambling may be right around the corner for Israel, the country’s social and economic cabinet having just given permission for two horseracing tracks to be built, equipped of course with full-fledged betting. In order to make this work, the Israeli government will be obliged to lift its long-standing ban on sports gambling.