Online gambling
Online gambling refers to the practice of placing bets and playing games of chance or skill over the Internet. The rise of technology in the twenty-first century has significantly enhanced the interactivity and safety of online transactions, attracting a growing number of players to various gambling websites. Despite its popularity, online gambling has faced significant legal and regulatory challenges, particularly in the United States. The legal landscape has been shaped by various acts, such as the Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA), which aimed to restrict online betting but often created confusion regarding legality.
By 2023, online gambling revenue in the U.S. had surged to over $19 billion, with the global market approaching $100 billion. The Supreme Court's 2018 ruling that overturned the Professional and Amateur Sports Protection Act (PASPA) allowed states to create their own online gambling regulations, resulting in thirty-five states legalizing online sports betting by 2023. However, the industry also faced obstacles from financial institutions that often blocked transactions related to online gambling. Despite these challenges and the historical resistance from legislative bodies, the online gambling sector has continued to thrive and evolve, shifting much of its growth and development to regions like Europe.
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Online gambling
The progress of technology during the twenty-first century allowed for a more interactive experience and safer online transactions, which attracted players to Internet gambling websites. Legislative bodies and financial institutions resisted the expansion of online gambling, however, and many restrictions were enacted to limit these activities.
In 2000, US Internet gambling revenue reached $2.2 billion. By the end of the decade, that number had risen to $6.3 billion. By 2023, revenue topped $19 billion. Worldwide, online gambling revenue was approaching $100 billion in 2023.
The major impediment to the growth of online gambling in the United States was its vague legal status. Initially, the 1961 Wire Act was used to hinder such activities. The act banned the use of telecommunication wires to transmit wagers but did not explicitly prohibit betting via the Internet, which had yet to be created. The US Department of Justice mainly prosecuted online sports betting, since the Wire Act clearly made it illegal to wager remotely on sports events. In October 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed. The act banned financial transactions related to illegal online gambling, without clearly defining online gambling. The legal situation was further complicated by often conflicting legislation at the state level. UIGEA permitted online gambling within state boundaries and tribal grounds, leaving legislation in the hands of local authorities.
The Department of Justice used both the Wire Act and UIGEA to prosecute and seize assets from offshore online gambling. These actions resulted in the withdrawal of some of the larger, more reputable operators from the US market. Following the adoption of UIGEA, online gambling revenue dropped significantly. The market recovered, and smaller, less-respectable operators filled the gap.
Online gambling in the United States also faced the hostile credit and banking industry. Major credit card companies and issuing banks blocked transactions related to online gambling and refused to license gambling websites. The high credit risk of such transactions forced financial institutions to implement advanced security measures, such as transaction coding systems, to avoid authorizing such dealings. In May 2018, the court ruled that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional, effectively clearing the way for legal sports gambling, including some online gambling. Overturning the act allowed states to regulate their own gambling laws; in 2023, thirty-five states had legalized online sports betting. Several other states were in the process of implementing a sports-betting system In total, only eleven states did not allow any form of online gambling in 2023.
Impact
In spite of restrictive legislation, legal actions, and hostile financial institutions, online gambling in the United States persisted and increased its participant base and revenue. Some of the reasons for its rise could be found in the inability of the legislative system to clearly define the legal status of online gambling. Such impediments to the industry in the United States shifted the global center of online gambling to Europe. Online gambling only grew after the US Supreme Court overturned PASPA.
Bibliography
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