The Legality Of Internet Gambling: Dependent Upon The State

In the United States the legality of internet gambling has become an issue of great importance with more and more people clicking on internet poker sites.  But placing a bet with or operating an Internet casino or sports book has never been clearly legal or illegal. Therefore, states have many of their own laws regarding internet gambling and online betting. While some specifically prohibit internet gambling, others do not – this does not mean that it is allowed; it only means the legality or illegality of it must be found in other state laws.

Definitions

While these definitions may vary somewhat from state to state, the terms generally mean as follows:

• Dominant Factor Test - This is the principle that most U.S. jurisdictions (states or territories) use in determining, legally, what is and is not gambling.  It is used to determine if the game is one of chance or skill.
• Social gambling - Social gambling involves games where everyone is on equal footing and there are no bookies or outsiders making any money off of the activity.
• Misdemeanor v. felony - This is not consistent in all states, but felony clearly carries the most serious consequences.
• Simple v. aggravated gambling - Here the distinction in most states is between and mere gambling and professional gambling where a third party makes money and the equal footing and mere player is gone.
• Express internet prohibition - These are the statutes that specifically prohibit internet gambling.  These exist in only a few states.  However, it is not a simple matter because internet gambling may still be prohibited by other statutes within the states that do not have an express law.

State Laws

Illinois, Iowa, Louisiana, Montana, Nevada, Oregon, South Dakota, Washington, and Wisconsin are the only states which expressly prohibit internet gambling. 

Most states do use the Dominant Factor Test to determine which game is one of chance. However, from this point on states treat social, simple and aggravated gambling very differently; and whether infractions are misdemeanors or felonies is also very different.

Some states, whether they expressly prohibit internet gambling or not, target the one placing the bets online.  Washington State has the most restrictive law making the placing of an online bet a Class C Felony.  This strategy is a difficult one to enforce. 

Other states target the companies that are making the money from the internet gaming – a strategy much easier to enforce.  However may do not operate in the U.S simply to avoid a run-in with state laws.  Louisiana has the harshest of such laws and prohibits anyone “in the world” from accepting a bet from anyone in Louisiana.  The punishment can be up to 5 years in prison and a $20,000 fine. 

Some states require that the internet game must reach into their state in order to be prosecuted.  That reach may include those that know or should know that people in the state would place bets. State laws seem to prevail here as the federal laws are very unclear.

Getting Legal Help

Whereas state laws are very different and the target and penalties are varied, be sure that you look into the law before you participate in online gambling.  In addition, since not all states expressly prohibit such gambling, you should seek the advice of an attorney who can explain the other statutes which may explain the consequences of online gambling.