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The United States is home to what may be the world’s premier gambling mecca, Las Vegas, and Native American casinos dot the landscape in any number of states. Even though these locations are providing brick-and-mortar betting services to millions of Americans, a nationwide online gambling market does not exist, with laws on both state and federal levels providing road blocks to the establishment of one.
For years the Interstate Wire Act of 1961 - also known as the Federal Wire Act - was the primary impediment to online gambling in America, as it prohibited the use of interstate communication for gambling purposes. In 2002, however, the U.S. Fifth Circuit Court of Appeals ruled that the Wire Act only applies to sports betting, but “does not prohibit Internet gambling on a game of chance.”
In 2011 the Department of Justice (DOJ) affirmed that ruling with a formal legal opinion stating much the same. Those rulings allowed for online gambling in the United States on a federal level, excepting sports betting. In order for an online casino to begin U.S. operations, however, it must also be legal on a state level. So far the states of Delaware, New Jersey, and Nevada have all passed laws allowing making online casino and poker play legal for their residents, with many more states strongly considering similar measures.
The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) dealt a huge blow to what was at the time a thriving online poker industry in the United States. The law "prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law."
In essence the law made it illegal for gambling companies to knowingly accept wagers from players residing in places with either a state or federal prohibition against online gambling. In response to the law and the following cases brought regarding the law, a large number of online betting sites simply stopped accepting players from the US, with a number of companies suffering massive devaluation as a result.
This day will live in infamy among the gambling world as 'Black Friday', a day which saw Party Gaming's public stock drop almost 60% within 24 hours of the decision. As a result, very few overseas gambling entities still accept American players, with almost all that do possessing reputations as shady, rogue companies.
A notable exception in UIGEA exists as it relates to skill-based games and fantasy sports. This exception has allowed sites like DraftKings to spring up with their daily fantasy sports (DFS) options, which are legal everywhere in the United States unless specific laws have been passed to outlaw them.
As of this writing the states of Arizona, Arkansas, Louisiana, Iowa, Montana, and Washington have all passed laws banning daily fantasy sports, while only one, Maryland, has expressly declared them legal.
Recent incidents regarding employees at the two major DFS companies, however, have opened daily fantasy sports to major legal scrutiny. Any changes in policy / regulation regarding these types of games will be addressed in our interactive map should they occur.
Thanks to the DOJ's clarification in regards to the Wire Act individual states are now free to regulate and tax internet gambling at their own discretion. As recently as February 2014, nine new states were reportedly considering such legislation, while New Jersey was looking into expanding their regulatory system beyond just poker and casino games.
The trend appears to be shifting towards increased legalization, but until laws become official, American players outside of Delaware, Nevada, and New Jersey still lack legal venues for online gambling.
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