Gambling Laws and How They Affect You When Gambling Online
Updated: December 2022

The institution of new laws and regulations governing online gambling and related monetary transactions have resulted in a backlash in the industry.

Many organizations that formerly offered online gaming access to U.S. gamblers have withdraw from the U.S. market since the passing of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), and similar statutes. Some software providers servicing the online casino and gambling industry have even taken restrictions a step further, refusing to license websites that provide U.S. players account access.

With all these restrictions in place, you may be concerned about the legal implications of gambling online. You may wonder if there will be a knock on your door, with enforcement agents awaiting you when you answer, if you’re able to gain access to a poker game or some other online gambling venture. The fact is that online gambling is entirely legal and the hesitance of many websites and software providers to allow U.S. gamblers access is only a knee-jerk response on their part to heightened restrictions and more stringent review processes.

To put your mind at ease and to fully educate you on the legalities of online gambling, following you’ll find an explanation of U.S. laws applicable to gambling on the internet.

UIGEA
Though often enforced by state legal systems, the UIGEA is actually a federal law. It was passed in an effort to reduce the incidence of racketeering and online scams and is not a federal ban on internet gambling, as some source might have you believe.
The UIGEA is a very vague statute that, in most instances, is not entirely enforceable. This is because the statute often conflicts with state and local laws and regulations governing gambling in general. The more prudent course of action for you then, is to review your local and state regulations regarding gambling and use those as a guideline for your online gaming activities.

The location in which you live will determine what laws are applicable. In most states, some forms of gambling are legal and entirely acceptable. The type and scale of gambling activities permitted in each locality is what determines whether your online gaming activities fall within legal pastimes, or outside the scope of what’s considered legal in your home jurisdiction.

The Wire Act of 1961
Again, in an effort to combat racketeering, the Wire Act of 1961 was passed. It’s a federal law that was indented to prevent crime organizations from laundering money and from running illegal gambling operations. The law is precisely directed at sport betting, and therefore is applicable to online wagers on sporting events, but not to online gambling in general. In fact, in December of 2011, the U.S. Department of Justice published an update regarding the Federal Wire Act, stating beyond a doubt that the law appling to sports bettering only and therefore not to other forms of online gambling.

State Laws and Regulations
Many online gamblers are disinterested in the legal aspects of their gaming activities, but it’s important that you pay attention to the state and local legal environment in order to keep yourself out of trouble.

Ineffective federal laws like the UIGEA and the Wire Act, as well as expansion in the online gambling industry, will no doubt lead to frequent and ongoing updates to state and local laws and regulations that do apply to your online gaming activities. This means you’ll need to keep an eye on gambling laws in your home state and in your region, as changes in the laws can have significant implications for you.

There are websites specifically designed for gamblers to keep themselves up to date on state gambling statutes and regulations. Regularly monitoring the laws in your home state and region is important. While in most states online gaming is not illegal, certain forms of gambling may be. Additionally, there are usually regulations that may limit the amount of money you can wager, the kinds of games you can play, and other types of limitations.