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by Eric Furman
The short answer is no. The long answer is, of course, much more complicated. When it comes to online gambling in the United States, the American legal system has more wild cards than 7-Card Stud. In fact, about 12 million Americans gamble online, and Internet gaming companies make upwards of $10 billion a year.
According to the U.S. Department of Justice, the Federal Wire Act of 1961 prohibits Internet gambling—even though there was no such thing as the Internet back then. But because the statute forbids wagering via wire, the Feds claim it extends to online gambling because the Internet runs through wires.
The purpose of the 1961 law was to clamp down on sports gambling, which was often tied to organized crime. It didn’t cover games of chance such as poker, roulette, or blackjack—the type of games most people play online. But even if you’re betting on your favorite sports team, the law tends to penalize the people involved on the business end. If you’re not running an online casino, odds are, you won’t
be prosecuted.
American authorities can only police online casinos located within the United States, which is why gambling websites operate offshore in places such as Antigua, Australia, and the United Kingdom. Plenty of governments worldwide license Internet gambling, and some sites claim that as much as 80 percent of their business comes from U.S. consumers. So, how does all that U.S. money gets into their hands? In 2006, Congress passed legislation that forbids American banks from making transactions with online gambling houses. In theory, they can only accept bettors’ money via cash transfer or Swiss bank account. But in practice, most online casinos blatantly flout the law. Typically, it works like this: The player uses a credit card to put money into an account with the online casino. The charge appears on the player’s credit card statement as something like www.silverjewelryplus.com or www.weloveroses.com or another fake company name.
Although online gambling is illegal, you probably remember seeing ads for it on Google. You won’t anymore, though. Microsoft, Google, and Yahoo! all paid fines for running ads for online gambling sites.
The fines weren’t stiff (Google lost about one-third of a day’s revenue), but the companies got the message. Or at least, they got the message that they needed to be sneakier. While you won’t see ads for partypoker.com anymore, you may see ads for partypoker.net, a poker-teaching site that links you to partypoker.com, the full-fledged gambling site.
Is Internet gambling illegal? Yes. Is it easy to do? Yes. Should you do it? We can’t answer that. All we can say is that you can definitely lose a lot of money playing online poker, and the U.S. Department of Justice isn’t known for its leniency.
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Comments (7)
Comment
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So somebody out there answer me this. Few years back I “bought” into a internet casino franchise, where I would purchase a domain name which I would advertise and get people to visit. My domain name would roll into the real casino website, by which I would get a cut of any losses by said customer, tracked through my domain name.
Legal, Illegal? I didn’t really think about the legality that much then, especially since I didn’t make money then. I would say not illegal since I did not “own the casino” but I am not a lawyer. Not the place to really question it but the article topic made it pop into my mind. If you don’t to respond here my email address is linked to my name. SORRY FOR THE LONG POST
posted by dbus on 8-16-2009 at 11:32 pm
I love me some mental floss, but I think legal issues, particularly those surrounding complex topics like online gambling, are best left to those with more than a cursory knowledge.
Law professor Nelson Rose on online poker: “There is no chance of being prosecuted if you’re a player. If you’re a company, you might be violating the law.” (except for in a few states like Washington where it is explicitly mentioned in the law)
http://www.pokernewsdaily.com/is-online-poker-legal-770/
Former professional online poker player turned political analyst Nate Silver on the legality of poker:
http://www.fivethirtyeight.com/2009/07/this-post-brought-to-you-by-poker.html
posted by randompokerpro on 8-17-2009 at 1:37 am
My (ex) roommate lost tens of thousands of dollars playing online poker. He seriously thought he was going to “get good” and “turn pro.” I had to call his father and tell him he needed help — and more importantly, I needed him off my lease. That was five years ago. I think he’s still living at home, waiting to ‘get good.’ He has a better chance of playing in the Little League World Series.
posted by Bert on 8-17-2009 at 8:23 am
Whether or not it’s illegal, I know you can get fired for doing it on the clock. My boss was cut loose after someone complained that he was playing poker at work. Not exactly sure where my company draws the line — I’m leaving this comment at work. I’ve seen other people watching porn in their office. And another co-worker regularly does freelance work for another company at his desk.
posted by Janie on 8-17-2009 at 8:52 am
I bet that there is a way to attract these people into spending this money in certain sanctioned and regulated gambling houses. Anyone want to throw down? 12-1 the government will do this in a year.
Seriously though, my state of Delaware has recently passed a bill legalizing sports betting. This move is expected to raise the revenue in our casinos. Only four states – New Jersey not being one of them (sorry Atlantic City) – have made this move. What gets me is why we we haven’t legalized this and online betting in places that can support it. As the article states, online gambling is a $10 billion a year industry. We should find ways to make that money flow through our system. Keeping it illegal will not stop the gambling sites, sports bookies, or other illegally operated businesses from doing what they’re already doing.
posted by Steven on 8-17-2009 at 8:53 am
Well there is $10 billion going over seas. The Feds should legalize it and tax it. It isn’t like the US economy is so great that the government should pass up an opportunity. Obviously many states have legalized gambling for the tax revenue. I just hope they’re smarter than my home state of Indiana. We have so many gambling & alcohol laws that just make no sense. For instance my favorite for gambling is a corporation can build a casino.However they have to build it on a boat (ship ….some sort of watercraft), however that vessel doesn’t have to move, just initially prove that it could move a few feet in either direction.
posted by Alan on 8-17-2009 at 10:50 am
I used to work for the fraud dept for a major credit card issuer. Cards would get blocked when suspicious transactions were processed or when they were blocked systematically for being overlimit etc. Online gambling came up all the time and is illegal in this jurisdiction. Some of those customers got angryyyyyy that we were telling them their business and “if it’s illegal, why have I been able to put the card through before?”
I remember one customer in particular who had called in with his account manager to put a note on the account never to authorize transactions with X company. He would call regularly after that trying to get the block removed so he could gamble. Sad.
posted by ab on 8-17-2009 at 2:34 pm