U.S. Gambling Laws Expected to Change in 2017

Gambling in the United States has always been complicated since different laws and restrictions govern different locales. There are specific laws that cover casino activities that take place under the auspices of Native American communities and other laws that relate to state lotteries and privately-operated casinos.

The United States Congress limited online gambling through the Federal Wire Act and the Unlawful Internet Gaming Enforcement Act. The Federal Wire Act was passed in 1961 and states that Americans may not pass information for sports betting across telecommunications lines while the UIGEA, passed in 2006, says that transactions from banks may not be made to online gaming sites.

Casinos are lucrative money-makers for the states and now, several state governments are taking matters into their own hands through bills that will legalize online gambling within their boundaries. Legislative action is pending in multiple states including in New York, Michigan and Pennsylvania.

New Jersey

New Jersey took the lead in the United States, legalizing many forms of gambling and making New Jersey gambling laws the nation’s most unrestrictive. Almost every type of gaming activity is allowed including horse racing, casino gaming, amusement games, charity games, off-track betting and other types of gaming pursuits. In 2013 the New Jersey legislature legalized in-state online gaming on specific authorized sites including via Caesars Interactive Entertainment site, the Golden Nugget Atlantic city site and the Tropicana Casino and Resort site.

The New Jersey gaming successes have inspired other states to follow suit. Casinos have operated in Atlantic City for decades and now, computer servers which are located in Atlantic City are eligible to serve online gambling websites that operate out of licensed brick-and-mortar Atlantic City casinos.

In order to evade federal prohibitions against online gaming NJ created a casino control commission. The commission

Caesars Atlantic City ensures that bets are placed from inside New Jersey. Over the course of the first year of operation the online activities generated approximately $100 million for New Jersey, leading other states to research their options for following suit.

New York

Gambling in New York has traditionally been relegated to native American tribes who operate tribal casinos in upstate New York. Thanks to 4 new land-based casinos the monopoly has been broken and gaming advocates believe that they can push the legislators to make gambling more easily available through the Internet.

The legislature is closely watching Pennsylvania which is close to finalizing online gaming in the state. Pennsylvania is just over the border from New York and it’s clear that New York state officials don’t want to lose out on potential tax revenues by continuing to ban online gambling activities in New York while residents can easily collect winnings (and Pennsylvania can collect the revenues) a few miles away. The legislators are also counting on increased gaming opportunities to bring jobs to New York and bring in tourism.

In New York, the legislature can’t legalize full online gaming. The state’s constitution prohibits gambling except for horse racing, lottery gambling and brick-and-mortar casino activities. While rewriting the state constitution would be next to impossible the lawmakers’ success in classifying internet poker as a game of skill will now allow Internet casinos to enter the market.

Expanding state gambling wasn’t a consideration until 2013 when New York voters approved the construction of four non-tribal casinos. Once the casinos were approved for Tioga Downs, Schenectady, Waterloo and Adelaar the door opened and gaming advocates began to explore options for other forms of New York gambling endeavors.
The advocates are confident that, as land-based casino gaming expands successfully, lawmakers will be more inclined to continue the expansion into the world of Internet gaming. They point out that the Federal Court of Appeals has already ruled that online gaming isn’t covered by the Wire Act and UIGEA is open to a court challenge.

Pennsylvania

In Pennsylvania casino activists are banking on Senator Jay Costa to push the cause of expanded gambling in the state. Costa is the leading proponent of gaming activity in Pennsylvania. Pennsylvania is presently home to 12 brick-and-mortar casinos including one each in Pittsburgh and Philadelphia and others in both rural and populated centres. Advocates see gambling as a money-maker and want to expand the options within the state. They do not, however, foresee healthy opportunities for new land-based casino centres and are therefore looking at online gambling opportunities.

The plan would allow brick-and-mortar casinos to partner with Internet gaming companies. In this way the state would be able to offer casino gaming and Internet poker and keep the revenues that are generated by the business.

Costa’s bill would license Pennsylvania casinos to offer online gambling. The casinos will be able to partner with other companies who obtain their own licenses and the state will recoup 25% of all gaming proceeds through a state tax.

Michigan

Michigan has seen a great deal of success in its Detroit riverfront casinos which draw gamers from Canada as well as from surrounding states. With this in mind Michigan legislators have been considering ways to bring online poker to residents and visitors.

An online gaming bill that was backed by MGM Resorts – owner of one of Detroit’s largest casinos – made its way through the Michigan House of Representatives this summer but was stymied in the Michigan Senate. The year ended and there are plans to introduce a new bill in 2017. Backers say that they will move ahead, even though strong opposition comes from Michigan Attorney General Bill Schuette. Schuette is adamantly opposed to the proposal and even signed a letter that circulated among state attorneys general which asked President-elect Donald Trump to take steps to ban all online gaming in the United States.

Summary

States’ laws vary widely regarding gambling. The majority of U.S. states allow gambling, even though some states label games of chance under a title of “Dominant Factor” that states that if any type of skill at all is involved, the games don’t violate the state laws against playing games of chance for money. Some states prohibit gambling on games of chance but do allow these games under the title of “social gaming.” The charge for gambling in some states is a misdemeanor but a few states make gambling a felony. Today, very few states (Indiana, Montana, Oregon, Nevada and Washington) expressly prohibit Internet gambling but in the states that have not outlawed Internet gaming, facilitating Internet casino activities can be difficult if not impossible.

One thing is clear – the situation changes from month to month and gamers in the U.S. enjoy bigger and better opportunities every year.






Written by Heather Harmon

I have been following the Canadian Lottery for both print and visual media outlets since the lottery's 1982 launch. My research focuses on the lotto's individual character as it pertains to its individuality in each Canadian region. The lottery's rollover feature and the pick-your-own-number feature are credited to her input. I enjoy spending time visiting the communities in which the lottery operates so that I can get a sense of the kind of impact that the Canadian lotto has on the localities in which it is offered. I specialize in reporting on legal issues which affect the Canadian lottery. My journalistic investigations are cited as having played a major role in maintaining the lotteries as safe and secure gaming venues for Canadians, ensuring that the lotto remains a protected gambling entity.