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Legality Of Online Gambling

Before joining up with an online casino, bookmaker, or poker room, it is wise to examine the legal aspects of becoming a player. Find out how gambling law affects players in different locations and which places have been known to be contentiously debated hot-spots for online gambling legislation.



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While it’s true that online gambling is a legally accepted form of entertainment in most countries around the globe, it also holds true that it is still an evolving industry.  A handful of countries, either with state-run gambling monopolies or those that have yet to iron out the particulars of regulation and taxation, have taken a drastic and often unpopular approach of disallowing online gambling for their citizens.  If unsure about the legality of placing bets through the internet, it's always a good idea to first check with local authorities to determine whether or not that activity is lawful for a particular jurisdiction.


Online Gambling In The United States

The United States has been a sort of hot-button topic regarding the legality of online gambling since the industry began, due mainly to the sheer volume of revenue generated by its residents.  Prior to the U.I.G.E.A. (Unlawful Internet Gaming Enforcement Act) of 2006, US residents accounted for nearly 80% of online gambling revenue – a percentage which dropped sharply after many i-gaming companies began closing their doors to US bettors once the U.I.G.E.A. became law.

In the years following the drop, online gambling revenue has been on the rise, as more and more US citizens are choosing to play poker and casino games online – the legality of which received some clarification in recent years.  The biggest obstacle to US citizens being able to play, besides the lack of operators catering to the market, has been the availability of banking options. The Gaming Enforcement Act, a somewhat hastily enacted and controversial piece of legislation, specifically targets financial transactions that fund online gambling, restricting U.S. banks and credit card companies from processing would-be deposits and withdrawals.

A good amount of fallout came from this so-called "online gambling prohibition". Companies such as Neteller, one of the largest payment processors for online gamblers, was more or less chased out of the U.S. market by the Department of Justice on grounds that they were violating the U.I.G.E.A. by facilitating safe and secure payment transfers between U.S. bettors and gambling operators. Without a secure means to process payments, many major operators and literally hundreds of online casinos and sportsbooks closed their doors to U.S. customers.

In effect, the U.S. Government chose to remove proven and reputable companies from the market, while smaller, and potentially unregulated outfits continue to operate. Some people have suggested that these actions are primarily about tax revenue, and state legislators aren't interested in seeing any of their constituents' gambling dollars leave the country - a position which violates the NAFTA free trade agreement and has had a profoundly negative effect on the financial sectors of countries with small market economies tied to online gambling, such as Antigua Barbuda, Curaçao, and Costa Rica. Some of these countries have challenged the actions in court, calling the United States a bully for its position, which runs contrary to the free trade agreement.

The regulation and taxation of online gambling has huge revenue-generating implications, and would likely help to ensure even greater security and fairness for players. In recent years, prominent members within the U.S. government have taken a proactive approach to exploring online gambling regulation. However, these positive steps have not been without considerable opposition. Numerous issues still need to be ironed out on a state-by-state level, as a majority of states already allow legal forms of gambling, such as lottery, horse racing, keno, and casino gambling, and many of the laws differ by location. Opposition has also arisen by government entities such as the Department Of Justice, which in 2007 seized over $50 million from online payment processor Neteller, and again in 2011 when the domain seizure of three of the top internet poker sites, which had been allowing U.S. players. While this upset a great number of players, as online poker is immensely popular in the United States, one can only remain optimistic that the legal wrangling of today may lead toward a regulatory framework and safe playing environment in the future.

In late 2011, the Department of Justice at last clarified its position on the Wire Act of 1961 in saying it did not apply to other types of gambling beyond sports betting. Despite a host of major operators leaving the US market due to previous governmental pressure and banking restrictions, numerous sites continue to accept US players, and are free to do under current gaming legislation.

Three states have so far approved online gambling, including Delaware, Nevada, and New Jersey - which became the first to allow online casino gambling with the launch of a US facing online casino by Betfair - and many more have online gambling proposals up for vote on upcoming ballots.

The US is frankly a little late to the game in developing its online gambling industry. Much time has been wasted in attempting to prohibit something that the majority of its citizens obviously want, and more time spent debating the legal ramifications therein. Until a national regulatory framework is created, or the U.I.G.E.A. is overturned, the US online gambling industry will continue to suffer as no convenient payment mechanisms are permitted. Players need access to secure deposit and withdrawal e-wallets in order to play, and the gambling enforcement act continues to declare that unlawful. If you feel strongly enough about this issue, please write your congressman or state representative.

(Note: Gambling laws are different in each location, and frequently changing. Fast Odds urges visitors to learn their local gambling laws before participation).


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