One of the biggest questions we get from Americans is:
Is it legal to bet online in the United States?
It’s a hard question to answer. Here’s why.
There are laws that make sports betting illegal in most states. Old laws that are heavy handed enough that they kept states like New Jersey – who happens to offer legal online gambling – from being able to offer sports betting.
On the other hand, you can technically bet online and get away with it. And I’ll show you how in just a second.
So, the real question is this:
Are you willing to take the risk?
Because there is a risk to sports betting online in the United States. No doubt about that.
But keep in mind we’re not lawyers. So what you’re about to read is for ‘informational purposes only’.
If you agree to that, then let’s get started.
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There are a couple laws that make sports betting, online or otherwise, illegal here in the United States.
The first is the Wire Act of 1961.
This law prohibits how bets are made – namely by phone – which makes it a bit outdated in the day and age of cell phones and internet.
Here’s a snippet of The Wire Act:
“The term “wire communication facility” means any and all instrumentalities, personnel, and services (among other things, the receipt, forwarding, or delivery of communications) used or useful in the transmission of writings, signs, pictures, and sounds of all kinds by aid of wire, cable, or other like connection between the points of origin and reception of such transmission.”
It’s hard to say if this applies to the internet since it was made way before the internet existed. You could make an argument that it does.
Either way, it’s never been used to go after sports bettors.
There’s also the PASPA – the Professional and Amateur Sports Protection Act.
This passed in the early 1990’s. It limited what states could allow sports betting within its borders. A few states were grandfathered in; this included Nevada, Delaware, Oregon and Montana.
Those are the two biggest laws that apply to sports betting. There’s one more law, but it applies to banking. More on that in a few seconds.
One last point to make –
Even though the laws above may or may not make (online) sports betting illegal.
Again, we’re not lawyers
Each state also has their own laws which may or may not make sports betting okay. The only way to know for sure is to check your local laws, and perhaps speak with an attorney.
Are you wondering how people can bet online anyway – especially if it’s looked down up and/or even illegal in the states?
It’s pretty simple, really.
Most, if not all laws, target companies and not the customers.
The one exception I can think of offhand are in the legal states like Nevada or New Jersey – or upcoming states like California – that have laws that say customers are at fault for playing at off shore casinos.
Otherwise the laws speak to companies. And all companies that continue to accept US players are offshore. They’re out of the country, located in UK, Costa Rica or parts of Asia. Places the USA has no jurisdiction in.
Meaning …the US – as far as I know – cannot do anything about them.
On top of that most offshore sportsbooks use non .com domain names – like .lv and .eu. That’s because the US apparently has jurisdiction over .com domains, which is how they got ahold of PokerStars, Full Tilt, and all the others back in April 2011 (the day dubbed ‘Black Friday’).
That’s the simple version anyway.
A second ago I mentioned another law that affects online gambling. More specifically, it affects the banking side of things.
This law is called the UIGEA – Unlawful Internet Gaming Enforcement Act.
This was snuck in with another bill in 2006. Many congressman even claim not to have seen this bill. But it was passed nonetheless.
The premise of the bill is this:
Banks, credit unions and third party processors are prohibited from processing transactions to/from illegal/offshore gambling companies.
It does NOT make gambling illegal for you, like so many people tend to think.
The problem this creates is many banks will not work with these (offshore) companies. Or, they get found out and/or shut down.
This happens on both ends – for the gambling company and for you.
This results in processing delays, which means it can takes weeks – sometimes months – for you to get your money cashed out.
And because so many companies that operate in the US are shady, you never really know if it’s a processing problem or a we-don’t-or-can’t-pay-you sort of problem.
It’s also possible the company was seized by our government. Which means your money will also be seized.
Don’t worry – there’s a good chance you’ll get it back. In the case of PokerStars, players got their money back right away.
But if the company is insolvent then it can be years before you get your money back. IF you get your money back. Like with what happened with Full Tilt players. It took a couple years before they got their money back. And, that’s only because PokerStars bought them out.
And that’s not the only risk you face.
I really need to point this out – we’re not lawyers. So you need to do your own due diligence.
But from what I understand, one of the biggest risks to playing online is that if you’re ever ripped off, you have no recourse. No way to get your money back.
That means gambling companies can take your money and run. Never pay you back. And that’s what many do.
It also means you may be doing business with gambling companies that are not licensed or regulated. So there’s no risks or consequences for any of their actions (good or bad).
Oh – and keep in mind you’re giving these companies semi-private information like where you live, your phone number, and possibly banking information.
And, while it may be slim, many states have laws against online gambling. So it’s possible you may face consequences if you’re ever caught (even though I don’t know of any cases where that’s happened).
The bottom line – things are pretty muddy in the United States. And I’d bet they stay that way for a while.
You can still play online if you want. There’s no doubt about that.
You just need to understand and be okay with the risks. And you should always play with money you can afford to lose, whether you lose it gambling, have it stolen, or seized.
Because those are all real possibilities.