US Gambling Ban on Casinos
Online casinos have been in the news recently, due to some impending changes in US law regarding gambling over the Internet. In order to fully understand the issue, it’s important to look at general issues of gambling and legality in the United States.
To start with, organized gambling is not regulated by Federal law. It is seen as a State-law matter. In many States, the issue very simple, indeed: gambling is illegal. In Nevada and New Jersey, casino gambling is legal, and has become a large industry. Other States take a middle ground. In Michigan, for example, gambling is illegal, but is permitted on the Indian Reservations, and by special license in the city of Detroit. The legality of online gaming is a hot topic right now, as the Federal government is starting to regulate the online gaming industry, and there are several bills, either recently passed or currently in Congress, on this issue. The outcome of this pending legislation will determine the future legality of online gaming for players in the United States.
The first of three bills affecting online casinos was passed in September, 2006. The bill banned the electronic transfer of funds from banks to online gaming accounts. As expected, sports leagues, which thrive on the betting inherent in their activities, supported the bill while banking groups opposed it. In the end, the measure was passes as a rider on an unrelated port-security bill. That alone shows the confusion inherent in the politics of online gaming; Congress was evenly divided on the issue, and was unlikely to pass the measure as a stand-alone bill. The bill’s sponsors attached it to the port security measure to guarantee passage.
Just passing a ban on bank transfers doesn’t make online gaming illegal, however. To start with, the measure had a built in delay of nine months before taking effect. In addition, the banking groups opposed to it have challenged it in the courts, both as an illegal restriction on their activities, and for its having been attached to an anti-terrorism bill.
The ban on bank transfers to online casinos is in doubt anyway. During the interregnum between passage of the measure and its now-delayed effective date, two more bills have been introduced in the House of Representatives.
The first of these was introduced by Rep. Barney Frank (D-Mass.), in April, 2007, as a direct response to the ban on bank transfers to online casinos. Called the Internet Gambling Regulation and Enforcement Act, this bill would circumvent the banking ban by simply making online gaming legal, and providing for Federal regulation of the market. The banking transfer ban would then become moot, as a legal bank transaction cannot be prohibited.
The second bill, the Skill Game Protection Act introduced by Rep. Robert Wexler (D-Fla.), would do the same thing for online poker, bridge, and chess, among other skill based games. As poker rooms are also enormously popular, and affected by the bank transfer rider to the Safe Ports Act, the SGPA was also written as a direct response.
All three of these measures are currently facing either Congressional debate or court challenges; it will be interesting to see what develops for the future of the online casino industry. For the present, however, and especially for US players, online gaming is in a sort of limbo: it is not illegal, but it is not wholly legal, either.
