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Internet Gambling Law

by Jerry "Jet" Whittaker
April 25, 2006


With an increasing volume of internet gambling business, instances of frauds are also rising. Some of the gambling businesses are themselves being conducted in an illegal way for illegal purposes. Hence, there arises a need to legalize it and make the online gambling business profitable for the nation.

US State Laws on Internet Gambling

Most US states have declared it illegal to operate any type of gambling businesses other than the state sponsored ones including the legalized activities like lotteries, horse racing, riverboat gaming. Most of these state laws are comprehensive.

Tennessee State Law says "a person commits an offence if he knowingly engages in gambling". Gambling is defined as "risking anything valuable for a profit whose return to any degree depends upon chance". It does not include any lawful business transaction in gambling. The phrase "for profit" says only gambling carried on as a business would be prosecuted in Tennessee.

Massachusetts Law states that anyone knowingly organizes, supervises, manages or finances at least four persons so that they can provide facilities / services or assist in the provision of facilities / services for conducting illegal lotteries or for illegal registration of bets or illegal purchase or sale of pools depending upon the result of a trial or contest of skill, speed or the endurance of man, beats, bird or machine, or upon the happening of any event, or upon the result of a game / competition / political nomination / appointment / election or anyone knowingly receiving from at least four persons compensation / payment in any form as a return from such lotteries, such registration or buying or selling shall be considered an offence and punished with imprisonment for up to 15 years or fine of up to $10,000 or both.

These laws on internet gambling differ from one state to another. Consulting an attorney to understand the intricacies of any law is advisable.

Federal Law on Internet Gambling in US

The federal law regulating the internet gambling prohibits those in the betting or wagering business from knowingly using the wire communication facility in interstate / foreign bets or wagers or transmission of information assisting placing of bets or wagers, on any sporting event or contest. Violation of the law is punishable with fine or imprisonment of up to 2 years and seizure of assets under racketeering laws.

Interstate transmission of bets or gambling information can be legal only if both the state of origination and the state where the bet is placed allow such bets / wagers.

There is legislation for prosecuting those using online gambling sites with a fine up to $5,000 or 1 year imprisonment or both. However, as of now, not the site user but only the virtual casino can be prosecuted.















































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