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States where sports betting is legal

states where sports betting is legal

with special attention to advertising issues

by Michael Bluejay, • Last Updated: November 2013

There is no U.S. federal law against gambling online! According to federal law (or rather, the lack of a law against it), online gambling is in fact perfectly legal. U.S. Attorney Catherine Hanaway admitted in a 2007 House hearing that just placing wagers online doesn't violate federal law. No American has ever been arrested, indicted, or prosecuted by the feds for gambling online, because there's no law against it. If online gambling were illegal I wouldn't be running this website for thirteen years, as an American citizen, living in the U.S. using my real name. And I occasionally gamble online, too, and I admit that publicly, like I'm doing right now. In fact, I just played online a few minutes ago.

Let's start with a quick summary:

  1. There is no federal law against gambling online.
  • Some states might have laws against online gambling, but even there prosecution against players is rare. I know of only two cases a player ran afoul of state laws (in extremely conservative states), both of whom were charged under their state's general anti-gambling laws, not any specific anti-online -gambling law. The first was Jeffrey Trauman of North Dakota. who in 2003 paid a $500 fine on what was probably over $100,000 in online sports bet winnings. ( Gambling & the Law ) The other was online sports bettor Roland Benavides of Oklahoma. who was charged in 2011 and in 2012 received a deffered sentence (which means that if he doesn't violate the terms of his probation, he will likely face no jail time). (News OK ) Some states have gone the other way and legalized online gambling in at least some form. (See the bottom of this page.)
  • It's against federal law for websites to take sports bets over the Internet. (It's against federal law for a site to take the bets, not for you to place them.) Federal law doesn't specifically allow or prohibit sites from taking casino or poker bets, just sports bets. For many years the Dept. of Justice interpreted the Wire Act to prohibit sites from taking casino/poker bets too, but most legal observers disagreed, and in Dec. 2011 the DoJ finally agreed that the Wire Act doesn't prohibit sites from taking casino/poker bets. (Online Poker News )
  • It's against federal law for banks to handle online gambling

    transactions (e.g. players making deposits or withdrawals into or from an online casino). Again, it's against the law for the banks to handle the transactions, not for you to try the transactions as a player.

  • Publishing advertisements for online gambling isn't specifically illegal, and it would be quite a stretch to make a case under a different statute (like racketeering or conspiracy). Small publishers (like me) have never faced fed action running ads for online gambling. The only publishers to face penalties were some huge publishers (Google, Yahoo, and Microsoft, in 2007), and a mid-size publisher in 2006 (The Sporting News). I wish they had contested the charges, since legal observers say they weren't breaking any law, but each simply paid a fine to end the matter quickly. None ever faced any criminal charges. The Sporting News' fine was equal to the money they'd collected from gambling ads. Google's penalty was only about a third of a single day's profit for them. ( ) Other publishers who took ads (like Esquire, who ran Bodog's poker ads) were warned by the DoJ not to take them any more, stopped doing so, and faced no penalties.
  • Number Four is is what the feds have focused on mostly. Since it's hard for them to go after websites and players (neither of whom are breaking the law), they go after payment processors. That makes it difficult to impossible for players to get money in or out of an online casino. The government is just starving us out that way.

    So that's the short summary. If you want more, the rest of this article will cover these issues in more detail. But first, some important caveats:

    • We'll consider only the United States, and even there we'll look at only federal law, not individual state laws.
    • The law and the enforcement are constantly changing, and what's true today could be different tomorrow.
    • I don't guarantee to have heard of every relevant case.
    • I'm a layperson, not a lawyer, and god help you if you rely on this article instead of seeking appropriate legal counsel for your situation.

    Rather than just considering the law, it's more useful to look at the potential risk of each activity. That is, which activities are more likely to result in a fine or maybe even jail time? Here's how things stack up, from most risky to least risky, based on our observations:

    Category: Forex

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