The USA & Online Casinos
The State of Play in 2010
Firstly, let's clear up one misconception spread by the mainstream press. Online gambling is NOT illegal at Federal level in the USA. It is however illegal in a few States and the onus is on the player to know whether they live in one of these areas. The States of Illinois, Indiana, Kentucky, Louisiana, Michigan, Missouri, Nevada, New Jersey, New York, Oregon, South Dakota, Utah, Washington and Wisconsin have all introduced specific laws surrounding online casino gambling, most of which indicate that it is illegal in their respective States, although even then the laws are grey in some areas.
But the situation appears to be changing. before I explain just what is happening, let me first give you a little background as to why USA online casinos are few and far between.
Firstly, let's clear up one misconception spread by the mainstream press. Online gambling is NOT illegal at Federal level in the USA. It is however illegal in a few States and the onus is on the player to know whether they live in one of these areas. The States of Illinois, Indiana, Kentucky, Louisiana, Michigan, Missouri, Nevada, New Jersey, New York, Oregon, South Dakota, Utah, Washington and Wisconsin have all introduced specific laws surrounding online casino gambling, most of which indicate that it is illegal in their respective States, although even then the laws are grey in some areas.
But the situation appears to be changing. before I explain just what is happening, let me first give you a little background as to why USA online casinos are few and far between.
Why are we Here?
Back in 2006, a law was proposed, backed by a handful of Senators, to make online gambling illegal. The 1961 Wire Act seemed to cover Sports Betting, but the advent of the Internet made even this law grey when it came to other forms of online gambling. Proposed initially on the basis of protecting family values, it became clear that it was not going to pass before the outgoing Bush Administration ended it's time in power. The Act was therefore bastardised and the outcome was the formulation of the UIGEA - the Unlawful Internet Gambling Enforcement Act - which aimed to make banks and payment processors responsible for preventing Americans making payments to online gambling companies not authorised by the State. Basically that covered everyone who didn't already have a monopoly.
Even this abridged version of the original proposition was tight for time and was up against a number of dissenting voices that - rightly so it has turned out - thought it was unenforcable and unworkable. Undeterred and aware that the Act only really stood to gain advantage ahead of the Presidentail elections, the politiciams responsible came up with a solution to force it through: tack it on to the back of a "must pass" security bill. Which is what they did, and at the eleventh hour the UIGEA went through on the back of the Safe Ports Act, a must-pass Bill aimed at tightening US ports security in the face of terrorist threats. The tenuous, but necessary, link being that the proceeds from online gambling could end up in terrorist hands.
Back in 2006, a law was proposed, backed by a handful of Senators, to make online gambling illegal. The 1961 Wire Act seemed to cover Sports Betting, but the advent of the Internet made even this law grey when it came to other forms of online gambling. Proposed initially on the basis of protecting family values, it became clear that it was not going to pass before the outgoing Bush Administration ended it's time in power. The Act was therefore bastardised and the outcome was the formulation of the UIGEA - the Unlawful Internet Gambling Enforcement Act - which aimed to make banks and payment processors responsible for preventing Americans making payments to online gambling companies not authorised by the State. Basically that covered everyone who didn't already have a monopoly.
Even this abridged version of the original proposition was tight for time and was up against a number of dissenting voices that - rightly so it has turned out - thought it was unenforcable and unworkable. Undeterred and aware that the Act only really stood to gain advantage ahead of the Presidentail elections, the politiciams responsible came up with a solution to force it through: tack it on to the back of a "must pass" security bill. Which is what they did, and at the eleventh hour the UIGEA went through on the back of the Safe Ports Act, a must-pass Bill aimed at tightening US ports security in the face of terrorist threats. The tenuous, but necessary, link being that the proceeds from online gambling could end up in terrorist hands.
The Effect on American Gamblers
The effect was immediate. The DoJ made a number of arrests on high-profile business owners, although it soon became apparent that the arrests were not sonly sportsbook related only, but also came with charges outside the boundaries of the new UIGEA which wasn't due to be enforced until later (eventually June 1st 2010). This was seen by many observers as primarily being scare tactics, but they proved very effective. The biggest and safest online casinos immediately pulled out of the USA without exception, and this is where the real problems started. Although the UIGEA wasn't an act of prohibition, the way it was enforced and this subsequent reaction started to send it down that road.
The main issue now faced for Americans was this. In most States, they were - and still are - able to gamble online legally, although clearly the US was trying to ensure that US money stayed in the USA by discouraging the activity. By 2006, the online gambling industry, although largely self-regulated, was relatively clean with rogue operations generally well hidden from view by the safe, serious and ultimately trustworthy operators. The UIGEA scared most of the "clean" operators away, leaving the door open for the less scrupulous operators to compete on a more level playing field with the few remaining good operators.
It is probably worth stating at this point that a large number of legitimate online casinos didn't have a choice in pulling out - the software providers that they licenced from ,most notably Wagerworks (IGT), Microgaming and Playtech made it a condition of the licence renewal.
Clearly the repurcussions of this are obvious. Americans have not only found it more difficult to find a trustworthy online casino, but complaints through player dispute channels have escalated considerably. That is not to say there aren't still some safe USA casinos, but finding them is much harder, as is finding a reliable deposit and cashout method.
The effect was immediate. The DoJ made a number of arrests on high-profile business owners, although it soon became apparent that the arrests were not sonly sportsbook related only, but also came with charges outside the boundaries of the new UIGEA which wasn't due to be enforced until later (eventually June 1st 2010). This was seen by many observers as primarily being scare tactics, but they proved very effective. The biggest and safest online casinos immediately pulled out of the USA without exception, and this is where the real problems started. Although the UIGEA wasn't an act of prohibition, the way it was enforced and this subsequent reaction started to send it down that road.
The main issue now faced for Americans was this. In most States, they were - and still are - able to gamble online legally, although clearly the US was trying to ensure that US money stayed in the USA by discouraging the activity. By 2006, the online gambling industry, although largely self-regulated, was relatively clean with rogue operations generally well hidden from view by the safe, serious and ultimately trustworthy operators. The UIGEA scared most of the "clean" operators away, leaving the door open for the less scrupulous operators to compete on a more level playing field with the few remaining good operators.
It is probably worth stating at this point that a large number of legitimate online casinos didn't have a choice in pulling out - the software providers that they licenced from ,most notably Wagerworks (IGT), Microgaming and Playtech made it a condition of the licence renewal.
Clearly the repurcussions of this are obvious. Americans have not only found it more difficult to find a trustworthy online casino, but complaints through player dispute channels have escalated considerably. That is not to say there aren't still some safe USA casinos, but finding them is much harder, as is finding a reliable deposit and cashout method.
So Where are we At?
As I write, in July 2010, there are moves afoot that will make a dramatic improvement to the situation in the USA. Ironically, this is down to the economic downturn and the need for States to raise money and where better than a multi-billion dollar industry that is currently untaxed? Family values? That's old news. Several States, most notably California, Florida and New Jersey have proposed regulatory frameworks for some forms on online gambling and I would be surprised if we didn't see some legitimate, fully regulated and undoubtedly taxed USA online casinos springing up in 2011.
Residents of States like Kentucky and those mentioned in the first pargraph of this article should probably not expect to see similar movements anytime soon, but over time, I think it's inevitable. In the meantime, the player has to make the decision as to whether they can gamble online within the laws of their State and where to play.
As I write, in July 2010, there are moves afoot that will make a dramatic improvement to the situation in the USA. Ironically, this is down to the economic downturn and the need for States to raise money and where better than a multi-billion dollar industry that is currently untaxed? Family values? That's old news. Several States, most notably California, Florida and New Jersey have proposed regulatory frameworks for some forms on online gambling and I would be surprised if we didn't see some legitimate, fully regulated and undoubtedly taxed USA online casinos springing up in 2011.
Residents of States like Kentucky and those mentioned in the first pargraph of this article should probably not expect to see similar movements anytime soon, but over time, I think it's inevitable. In the meantime, the player has to make the decision as to whether they can gamble online within the laws of their State and where to play.