Is Online Gambling Legal


by Jerry "Jet" Whittaker
June 04, 2006

Online gambling is legal and regulated in many countries including the United Kingdom and a number of nations in and around the Caribbean Sea. The United States Federal Appeals Courts has ruled that the Federal Wire Act prohibits electronic transmission of information for sports betting across state lines. There is no law prohibiting gambling of any other kind. Some states have precise laws against online gambling of any kind. Also, owning an online gaming operation without proper licensing would be illegal, and no states are presently granting online gaming licenses. The government of the island nation of Antigua and Barbuda, which licenses Internet gambling entities, made a complaint to the World Trade Organization about the U.S. government's actions to obstruct online gaming.

Legal issues related to online gambling in various countries

The Caribbean country won the preliminary ruling but WTO's appeals body has partly reversed that favorable ruling in April, 2005. The appeals decision effectively permissible state laws prohibiting gambling in Louisiana, Massachusetts, South Dakota and Utah. Nevertheless, the appeals panel also ruled that the United States may be violating global trade rules because its laws regulating horse-racing bets were not applied equitably to foreign and domestic online betting companies. The panel also held that definite online gambling restrictions imposed under US federal laws were inconsistent with the trade body's GATS services agreement. In March 2003, Deputy Assistant Attorney General John G. Malcolm testified before the Senate Banking Committee concerning the special problems presented by online gambling. A major anxiety of the United States Department of Justice is online money laundering. The anonymous nature of the Internet and the use of encryption make it particularly difficult to trace online money laundering transactions.

Legal issues in various years related to online gambling

In April 2004 Google and Yahoo!, the internet's two largest search engines, declared that they were removing online gambling advertising from their sites. The move pursued a United States Department of Justice announcement that, in what some say is a contradiction of the Appeals Court ruling, the Wire Act relating to telephone betting applies to all forms of Internet gambling, and that any advertising of such gambling might be deemed as aiding and abetting. Critics of the Justice Department's move say that it has no legal basis for pressuring companies to remove advertisements and that the advertisements are prevented by the First Amendment.

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