U.S. Federal Online Gambling Laws Are Shrouded In Myth

The Truth Never Mattered Here

The campaign to try to curtail online gambling in the U.S. is based far more on myth than reality, but given that the government is pretty much powerless to stop it, they do have to rely on something.

So what they ended up falling back on is a campaign not based upon fact, but instead on misinformation and intimidation, and a lot of people have bought it, and a lot of sites have as well, but not everyone is fooled.

If you ask the U.S. federal government, they will still try to tell you that online gambling is illegal under federal law. The funny thing is, the federal government does not even have the power to make gambling legal or illegal, as this falls under the power of the states under the Constitution.

There has been several bills in Congress that have been proposed to both make online gambling legal and illegal, but they can do neither. The most that the federal government can do here is regulate interstate commerce, for instance with prohibiting financial transactions related to illegal online gambling, as the UIGEA seeks to do.

This doesn’t pertain to the act of gambling at all of course, it only applies to financial institutions, which is the first thing people get confused about. Of course if the gambling is illegal, that’s another matter, but this law doesn’t make it illegal, nor can the federal government even do this with any law.

The Sham of the Wire Act

They did claim that the Wire Act made it illegal, but the Wire Act couldn’t either, as it only applies to businesses transmitting gambling information across state lines, specifically sports betting information. Whether this gambling is legal or not is a separate issue, and again not within their power to decide, and this does not even pertain to sports bettors themselves.

When the Federal Court of Appeals ruled in 2002 that the Wire Act does not apply to online casino gambling or US online poker, the Department of Justice didn’t care, and for many years stubbornly maintained that the court was wrong, even though the courts are the ones that ultimately decide.

Later, when their position questioned whether state lotteries were in violation of this law, they finally caved in and admitted the Wire Act only applied to sports betting as the court decided. They still try to confuse people with this though, but in a more vague way, just saying that federal law prohibits online gambling without citing any reasons anymore.

They Just Don’t Admit Defeat

There is a movement to rewrite the Wire Act and try to use that to shut down the regulated online gambling that several states now have, in Nevada, New Jersey, and Delaware, with several more on the horizon. This is another sham though, and in these cases the gambling is occurring exclusively in these states, and the most they could do is look to limit compacts such as that formed between Nevada and Delaware.

That’s not how it’s billed though, and their proclaimed mission is to shut all of this down, in spite of clearly not having the legal power to do so. This is all about propaganda though, not reality.

Another myth is that unless a state has regulated gambling, it’s illegal to gamble online, by default it would seem. Something is only illegal if it is made so by law, nothing is illegal by default, and in many states, whether online gambling is legal or illegal is quite unclear.

To set up a business in a certain state you do need permission, whether this be a gambling business or any other type, so that part is subject to regulation, but people gambling at sites outside the state and country present a different matter.

There is even some question whether you are gambling in your state or not when you gamble online, for instance this could be seen as similar to going to a casino in another country, only you don’t have to fly there physically, you fly in the cyberspace realm instead.

The most ridiculous part of this story though is the U.S. government indicting foreign companies for violating U.S. federal law by offering online gambling to its residents. Even if such laws did make gambling illegal, which they don’t, foreign companies are in no way subject to U.S. law, and gambling is legal in the country where they are located, and whether it is or not in the U.S. is meaningless.

So the attempts by the U.S. government to curtail US online gambling has been limited to smoke and mirrors, with a whole lot of smoke blown.