Online gambling – legal or just loopholes?

There seems to be “confusion” on whether online gambling is really illegal or if it is just another example of laws not being able to keep up with technology.  Currently US bettors are using foreign sites that are privately owned as a way around the gambling restrictions.  A representative from

Nevada did introduce legislation that would allow a study of the effects of legalized Internet gambling.  Some of the concerns voiced here are about restrictions on those under 21 and how to pick out those individuals with gambling problems. 

 

One of the loopholes seems to be around online horse-racing bets.  Per the article – “The Interstate Horseracing Act, first passed in 1978 and amended in 2000, includes a provision that allows betting parlors to cover bets on tracks in other states. The industry interprets that language to include Internet bets, and several large firms now accept millions in wagers annually.”  Yet – the Justice Department has indicated that these bets are in fact illegal – but there has been no action taken against any of these sites. 

 

The Justice Department is now going after the companies that transfer funds for these bets in the

US market.  Two of these companies have been prosecuted under the 1961 Wire Act which was created to intercept phone calls between bookies – back in the “old days”.  These companies paid fines of around $100M and have since pulled out of the

US

market in order to avoid future troubles. 

 

There was an act passed in 2006 (the Unlawful Internet Gaming Enforcement Act), yet it seems that this law doesn’t define what illegal Internet gambling is.  It does tell banks to ban payments to offshore betting sites, but there is argument over how this can be controlled. 

 

The UIGEA and the US actions are being compared to the Prohibition approach to drinking in the 20s.  Many argue that by implementing these actions, the

US

government is forcing those who are going to gamble to do so in more dangerous ways since “reputable” companies have been forced out of doing business in the

US

.

 

With the college football bowl season and then the Super Bowl coming up, I’m sure there will be many people who place bets through the sites that are still operating.  This article leads me to believe that the only ones who should worry about this are the banks who are transferring the funds and possibly the betting sites – but not those making bets.

 

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/30/AR2008113002006_pf.html

Comments

[free bet]

its quite apparent that Democrats will try to regulate it once Obama comes into power

[Wyatt Cavalier]

One risk online gamblers face is that of frozen assets once these offshore sites are indeed shut down. Often, these sites go dark over night, and it becomes impossible for the users to request a refund check.

Also, it seems unfathomable to me that when users are required to use a bank or credit card to deposit money that there is no way to verify the gambler's age. Certainly this information can be accessed via the transaction.

[Karl T. Muth]

I vacationed in Curacao last winter and it's the center of online gambling. In fact, there are so many casinos incorporated there you wonder if they could actually fit on the island (they can't... most are just websites...). This is another case where it's odd that more jurisdictions don't compete with each other. There seems to be rampant competition over strange types of gambling (pick-a-number ticketed lotteries, for instance, which nearly every state has some version of) but not other types.