Trying to get your head around the gambling laws in America can be tricky, especially as we are currently going through a process of significant changes. Not only does each state have its own regulations about what constitutes legal gambling, once you try to gamble online, the rules change yet again. This is due to confusion surrounding a law from 1961 - known as the Federal Wire Act.
The Act's original purpose was to stop organizations being able to move money across state lines by laundering it through sports bets. However, the invention of the internet threw a spanner in the works. This is because content is designed to not only move across state lines, but also international borders.
In 2001 the decision was made to include all forms of sports betting and internet gambling in the interpretation of the Wire Act, meaning that all these activities were banned. But campaigners have been challenging that decision for years, and in 2011, the DOJ reversed its decision.
2018 saw yet another U-turn, with all internet gambling activities once again being banned under the Wire Act. But having seen how beneficial legalizing online gambling and sports betting could be, many states continue to fight against the current interpretation. In fact, many states have now started to review their gambling laws, to take into account the uses of new technology. Currently, 75% of US states have either legalized sports betting or are preparing to, with bills currently under discussion.
Leading the Way
Pennsylvania was one of the first states to pass a bill proposing to legalize online sports betting, way back in 2016. Because of their high taxes, they currently have the highest annual tax revenue from the US casino market. They also have one of the fastest growing gambling industries, with the lottery alone making over $4 billion in annual revenue.
It's not just sports betting that's legalized in PA either. Other gambling options quickly followed in 2017, with the following now legal in the state:
- Online casino games
- Online poker
- Online lottery
- Daily Fantasy Sports betting
- Tablet gaming
- Video gambling terminals
- Mini casinos
What Makes PA Different?
PA's diverse history has given its citizens an open view on gambling.
PA doesn't have a long history with gambling, unlike other states like Louisiana. This probably worked in their favor in making changes to the rules.
Another reason why PA has a different attitude to gambling is because the original colonies were made up of a diverse range of settlers from all different backgrounds, cultures and religions. Without a unified opinion on the matter, like colonies in Utah who all followed the same religion, PA residents were more open to and accepting of new ideas.
The first state lottery and sports books were opened in the 1970s and regulations remained largely unchanged until the late 2000s.
PA and the UK
The United Kingdom has a similarly lenient view on gambling, recognizing, like PA, the value that taxing such enterprises can have on the economy.
By regulating the industry instead of banning gambling outright, the UK ensures that only top-quality casinos can operate. To be granted a gambling license in the UK, online providers must adhere to their rules. This includes:
- Agreeing to pay taxes
- Offer certain protections to their users
- Abide by the measures in place to reduce problem gambling.
In return, the UK benefits from a rapidly growing and thriving gambling industry, which declared a gross gambling yield of Pound 14.2 billion last economic year.
Part of the reason for the UK gambling industry's success is its ability to attract big name operators. Reputable businesses like 888casino are regulated by the Gambling Commission, so UK players can be assured they're getting a trusted service in their online casino offering.
Will the US Catch Up?
The legalization of online gambling is still up for debate in many states.
The US is decades behind other countries in terms of establishing a successful online gambling market. But those states which have decided to embrace the industry are on their way to catching up.
One reason for this is because they have been able to embrace the knowledge of existing providers, who have been invited to start offering their services to US customers. These online casino providers have either launched new operations in the US or partnered with US brands to benefit from their loyal customers. This has meant that any newly launched online casinos are already of high quality and host a good selection of available games.
With the industry able to start up quickly by using already developed brands, the US states which legalized online gambling should be well on their way to having a globally competitive industry. It looks unlikely that the entire country will follow suit, with as many as 25% of states still refusing to entertain the idea of legalizing any form of gambling. But in those that have opened their doors, business is booming, and many hope that their success will encourage other states to reconsider their current standing.