The legalities of gambling online...
In most jurisdictions around the world, the law is still a long way behind the technology and issues applying to online gambling. As a result, the question of whether or not it is legal to gambling online can rarely be answered definitively. It is probably fair to say also, that government attitudes to online gambling vary significantly, from whole hearted support, to strong opposition, to indifference.
Efforts are being made by governments around the world to enact online gambling specific legislation specifically addressing the legality of internet gambling within their respective jurisdictions and the stance being taken (ie ban versus regulate) differs substantially from jurisdiction to jurisdiction.
The UK and European Union most notably seems to be leaning toward the regulation approach, while the US grapples with the practical obstacles associated with their decision in 2006 to illegalize payment processing for internet gambling operations.
What is clear though is that most legislative efforts are being aimed at operators (the casinos) and facilitators (eg credit card companies etc) and not players. This is an important point to note and means that amongst all the confusion the one clear position is that aside from some exceptions, it is not illegal for you the player to play online regardless of where you live. You may however be unable to play at certain casinos because they are legally prohibited from taking your business.
A great summary of the current legal position pertaining to online gambling around the world is set out at Wikipedia
The position in the US...
US State Gambling Laws
Up until reasonably recently, regulation of gambling in the United States was left exclusively to the State Legislatures, who determined the legality or otherwise of gambling activities within their jurisdiction. Some states have legalized many forms of gambling, while others have legislated to make it illegal to participate in any form of gambling other then the states lottery. Nevada is the obvious example of a State which has embraced gambling as a legal form of commerce, while Utah is noted for its strong anti-gambling stance, and laws deeming all forms of gambling within its jurisdiction illegal.
US State gambling laws were all drafted long before the advent of the Internet, and they do not have provisions dealing specifically with online gambling.
US Federal Gambling Laws - Pre September 30 2006
Specific online gambling legislation
Existing Federal Laws
Federal laws relating to gambling were passed by Congress more recently (than State laws) to deal with inconsistencies in State based gambling laws, especially as they applied to interstate commerce. Until 2006, US federal laws applying gambling activities were all drafted before the advent of Internet gambling. There are a number of current federal laws that have indirect application to online gambling. These are discussed below.
Exactly how this Act applies to Internet wagering is hotly debated. One school of thought in legal circles is that the Wire Act broadly covers any interstate use of the Internet that is related to placing or receiving bets. A second school of thought is that the Wire Wager Act cannot be applied to online gambling generally for two reasons. First, the words "wire communication facility" only apply to transmissions that use wires and the proliferation of wireless Internet access would therefore fall outside the scope of the Act. Second, reference to "bets or wagers on any sporting event or contest" implies the Act might only apply to wagering upon sporting events (not card games or other games based upon chance).
The above 4 Statutes all contain provisions that could be construed to apply to internet gambling. However, as for the Wire Wager Act, the appropriateness of their application is strongly argued, and even if they could be adjudged to apply to Internet gambling, their application would be restricted to operators only, and not players or peripheries (ISP's etc).
Given these Statutes questionable validity with regard to their application to online gambling, and also the fact that US prosecutors will always have a difficult time coercing defendants to appear in the United States to stand trial, actual prosecutions in the US in this area are extremely rare.
US Federal Gambling Laws - Post September 30 2006
In September 2006 Congress passed the Unlawful Internet Gambling Enforcement Act of 2006 ("UIGEA"). UIGEA makes it a crime for a bank or financial institution to facilitate the transfer of money to an online gambling site, thus curtailing US residents ability to fund their online casino/sports book/poker room account.
Its implications for operators, many of whom are outside the jurisdiction of US lawmakers anyway is interesting. Some have taken the position that efforts by the US Government to prohibit banks and credit card companies from allowing players to deposit funds is enough to warrant closing US player accounts and not accepting new US players. Others have continued to accept US player accounts via a number of payment mechanisms available to US residents such as UseMyBank.
Just to muddy the waters further, the small Caribbean nation of Antigua Barbuda has recently won a World Trade Organization ruling, finding that U.S. legislation criminalizing online betting violates WTO commercial services accords.
Further, the UIGEA has been condemned by European Union officials who claim that it beaches free trade agreements in place between the US and Euro zone. Further, financial institutions in the US, who are most affected by the operative provisions of UIGEA have complained that practical compliance with the Act will prove an onerous burden on their payment processing systems and is virtually unworkable.
European Commission Finding
Adding further pressure to US lawmakers to amend their current legislative approach to online gambling, the European Commission, the EU's executive arm recently handed down a report finding that US anti online gambling laws were protectionist and contrary to EU-US free trade covenants.
Current moves are afoot by members of US Congress to have the law repealed.
The position in the UK
The UK's position is set out in the (reasonably) recently enacted Gambling Act 2005, the operative provisions of which came into effect on September 2007. The new Act provides a single, all encompassing piece of law to cover all forms of gambling in the United Kingdom (besides the National Lottery and Spread Betting), and supersedes the now defunct Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968 and the Lotteries and Amusements Act 1976.
Key provisions of the Act relevant to internet gambling (termed "Remote Gambling" in the Act), including casinos, sports betting, poker rooms and any other form of real money wagering online or via mobile telephony devices are listed below:
The position in the rest of the EU
All EU Member States are are bound to observe the provisions set out in the European Communities Treaty. Key among these is the four freedoms principle, one of which is the freedom to provide services - set out in Article 49 of the EC Treaty.
In essence this Article makes it illegal for a Member State to legislate to prohibit residents from accessing a service provided by operators from other Member State, where that same service is able to be provided by local operators. The law was formulated to foster free trade between Member States and to discourage restrictive trade practices and the protection of locally licensed monopoly operators.
The European Commission has rules that the freedom to provide services provision applies to online gambling services as it does all others. As a result, any Member State with locally licensed online gambling operations (eg state lottery etc) cannot legislate to try to block foreign providers of the same service. Such legislation will be legally unenforceable and will also attract infringement proceedings from the EC.
As at April 2009, 10 Member States, including France and Germany have been the subject of EC infringement proceedings. The French Government have since announced plans in March 2009 to enact proposed laws that will regulate and tax internet gambling. The laws new laws are planned to come into effect early 2010.
The position in Australia
Australia was one of the first countries in the world to enact legislation aimed specifically at online gambling.
On 28 June 2000 the Interactive Gambling Bill became law.
The legislation is clearly aimed at the casino/sportsbook operators and not players. The Australian Government is now faced with the very onerous task of trying to enforce this legislation.
Disclaimer: 4 Online Gambling is not a legal authority. The information contained on this page is a complication of various information sources and does not constitute formal legal advice or opinion.
Udated 29 April 2009
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