The Pitfalls of American Gambling Legislation


The Pitfalls of American Gambling Legislation

Safe Milli
| October 13, 2021 Last Updated 2021-10-13T15:20:10Z
Gambling and sports betting is a thriving industry across the world. People have an affinity for placing bets on their favorite sports teams or on a game of cards, and as adults, many people will find a way to gamble whether it's legal or not.
American Gambling
For example, there have been many cases where people chose to gamble in the back of restaurants or in hidden rooms, even when gambling was illegal.

And while less popular, there is still illegal gambling going on across the country. Illegal gambling is a concern for Las Vegas, an area of the country best known for gambling. Large-scale casinos in Vegas have had a significant role in shaping the legal landscape of gambling in the US.

Commerce Clause and Gambling Pitfalls

The Commerce Clause had led to regulation of:

  • International gambling
  • Interstate gambling

The United States Congress passed the clause, which allowed for numerous other laws to come to fruition. For example:

  • Transportation of lottery tickets is illegal between states with certain exceptions
  • Sports betting is largely illegal, with some exceptions

Each state in the country has the right to determine what type of gambling is allowed in the state. As a result, regulations can vary significantly from one state to another, making it difficult for sites like to review casinos in the country because players often have many restrictions put on them.

States have the power to:

  • Set legal gambling ages
  • Set gambling age by activity

If you look at the state of New Jersey, you'll find that an 18-year-old can purchase a lottery ticket or bet on horse racing, but residents of the state, and anyone coming into the state to play at a casino, must be 21 or older to play.

While the ability for each state to set its own laws for gambling is a good thing, it's also a major pitfall. One key issue is that even residents from nearby states often don't realize that while they can gamble in their own state, they may not be able to bet in another state.

And on the other side of the argument, some residents of one state may need to go a few minutes outside of their state to circumvent local gambling laws.

In short, the state and local laws make it difficult for residents and non-residents to follow laws. Federal rules for gambling would make the industry become more streamlined and open up the doors for more international tourism to boost local economies.

Another issue that exists with local laws is the presence and growth of online gambling.

More people are turning to online gambling in states with strict restrictions because it's one way to circumvent local laws.

Online Gambling and the Lack of Legal Guidance

Internet gambling is a massive industry across the world. Countries are bringing in hundreds of millions of pounds in revenue from online gambling activities, but the US has very complicated laws for online gambling.

Online gambling isn't illegal, but it's not as easy as a "legal" or "not legal" answer.

Federal Online Gambling Laws

If you examine federal laws, there are no regulations in place that ban online gambling in the country. So, what's the problem with online gambling and why are US players blocked in so many countries?

Confusing laws.

  • Federal Wire Act. In 1961, way before the Internet and online gambling, the Federal Wire Act was passed that made it illegal to place bets across state lines. If an online casino is located in New York, it would be unlawful for players in California to place bets. The law also complicates international gambling.

  • Professional and Amateur Sports Protection Act. In 1992, this Act passed into law, making it illegal for states that weren't offering sports betting at the time to offer it in the future. However, the Supreme Court overturned the decision and it's now up to states to allow or prevent sports bets.

The overturning of the Act was a significant advancement for gamblers because it opened the doors for many overseas gambling sites to offer sports betting in the US.

However, what happens if a state that allows sports betting bans it? Do these international sports betting websites have to disallow players from certain states? Can states pursue legal damages from online sports betting companies in other countries?

These questions make it difficult for some casinos and sports betting sites to want to operate in the United States, even in a limited capacity.

Illegal Online Gambling and Convictions

Illegal online gambling is a big question mark for online casinos in other countries. For example, different countries would need to ban players from three main states that have laws that make online gambling a crime:

  • Louisiana
  • Utah
  • Washington

However, no one has ever been convicted of a crime for online gambling in these states, even though it's technically a crime to gamble online in these three states.

The states where online gambling is legal are:

  • California
  • Delaware
  • Illinois
  • Indiana
  • Iowa
  • Nevada
  • New Hampshire
  • New Jersey
  • Pennsylvania
  • Rhode Island
  • West Virginia

In other states, regulations remain a grey area, which is a concern for casino and sports betting operators that don't want to invest in marketing in these states if they decide to ban online gambling.

Will a player be in trouble for gambling online?

Maybe. Even if there are no convictions yet, it's a concern for both players and operators that want clear, concise laws in place.

Wrapping Up: A Confusing Gambling Landscape

Federal online and casino gambling laws don't provide the confident legal answers that allow major and smaller online casinos to offer their games in the country. State laws vary drastically, forcing operators to operate in 50 different jurisdictions with their own rules and regulations.

Geo-blocking users from some states allows the opportunity for international gambling. Still, it's an extra hurdle that stops many online casino operators from offering their services in the country.

The ever-changing gambling landscape may keep a lot of online gambling out of the US until more universal laws are implemented for players and operators to follow.
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