The future of iGaming and the United States of America is bright despite their difficult pasts. The adoption of iGaming-friendly regulations is slow but consistent due to the country’s convoluted legal system, which is made up of states with varying degrees of autonomy. It’s just another business, after all, and if there’s one thing you should know about America, it’s that Uncle Sam loves businesses.
The term “online gaming” is not well defined. Due to the difficulty of forbidding or allowing something that is not widely understood, this causes issues in many jurisdictions. Even professionals in the field give this term different, more specific definitions.
For the purposes of this article, “iGaming” is defined as any form of online gambling that relies on games of chance. We don’t include sports betting and fantasy sports because, despite the fact that legal sports betting and iGaming regulations frequently go hand in hand, it’s not always the case.
So, iGaming activities are:
- Online poker
- Online casinos and roulettes
- Online lotteries
Now that we are clear on the topic we will be discussing, let’s examine iGaming’s legal standing in the US.
iGaming in the United States: Overview
The laws that are applicable to iGaming are created on two levels:
- Federal
- State
Let’s start with the federal level.
It was widely agreed that the Wire Act of 1961 governs this industry because there is no clear definition of “iGaming. However, the DOJ issued a statement in 2011 stating that this act only applies to interstate sports betting in response to questions from New York and Illinois. This made iGaming in the US less illegal rather than making it legal. In the decade that followed, there was legal back and forth, but the situation remained the same. The status of iGaming was left up to the states to decide.
The slow adoption of iGaming
Only a few particular jurisdictions and Indian reservations could legally offer traditional brick-and-mortar gambling. The majority of those who were granted licenses for online gaming activity in all seven states that have permitted iGaming since the initial DOJ opinion were those who already held a gambling license. While there are some variations, the majority of online gambling is managed by already established businesses. Some states do permit third-party entities to apply for an igaming license, or some Casino software can use different brands and operate several seemingly independent online gambling ventures.
In the seven states that permit it, there are typically three different types of organizations that operate legitimate iGaming businesses:
- State lotteries
- Tribal or state-owned casinos or racinos (casinos with a racing track)
- Third-parties that got their license from a governing body
Online gambling from an outside jurisdiction
By its very nature, the Internet is not bound to any particular place. Licensing physical locations, which is effective for traditional gambling establishments, does not translate well to the digital world.
iGaming was viewed much more favorably in Europe and many other parts of the world, which prompted the development of significant iGaming hubs (like Gibraltar or Malta) that dominated online gambling. These websites, which are operated from these hubs, are still reachable from the US.
According to the law, it is illegal to gamble on unlicensed websites. Additionally, even if you are a resident of that state and are traveling, it is illegal to access a website that is legal in one state from another.
Of course, this is just theory; in reality, people can safely access these websites whenever they want thanks to tools like VPNs. However, promoting these websites may result in a ban, so be cautious to only advertise things that comply with local laws and your ad network’s compliance guidelines. Casino owners are frequently required to use GPS and IP tracking by state regulators to make sure that only authorized residents can access iGaming websites.
US citizens are not shielded from fraud and financial difficulties if they gamble on foreign websites (or websites that are legal in other states). Legal websites provide their users with greater security.
