Saturday, March 25, 2006

The federal Wire Act prohibits sports betting under certain conditions. In the case of criminal charges under the Wire Act were filed and upheld against the operator of an online sports betting site. While prosecution of betting operators has occurred, as in the Cohen case, there has been no known prosecution of a customer. There have been several federal laws proposed in the legislature that would have prohibited additional forms of online gambling beyond sports betting. The proposed laws have been enacted. Betting on horse racing and dog racing are specifically authorized under federal law if certain criteria are met. Federal gambling law does not address games of skill, and there are many skill gaming sites that operate within the United States. If a bettor and an operator are based in different states, the Department of Justice views gambling as occurring in both jurisdictions. Despite the narrow limits of federal gambling prohibitions, barriers to online gambling in the United States extend beyond legal restrictions. The law clarifies that credit card agencies are not in violation of racketeering laws if they permit their services to be used for online gambling, most major credit cards in the United States have adopted policies of declining online gambling transactions. The internet escrow service settled a New York state lawsuit by adopting a similar policy of declining transactions from online gambling sites. State laws concerning online gambling vary significantly. California specifically permits online wagers on horse racing, and sites licensed in that state have accepted wagers from other states. Nevada also specifically permits online gambling for state-licensed sites. Read further...