Online Sports Betting - Is online sports betting legal?

Whether or not Internet gambling is legal is a complex issue. For many years the United States argued against the legality of Internet gambling by citing the Interstate Wire Act of 1961, which was created to prohibit sports gambling between states using a telephone. But because the Internet hadn’t been invented when that act was implemented, many legal experts nowadays have questioned whether that law pertains to the Internet or not.

Also, the Wire Act wasn’t specific enough to clarify whether it pertained to all forms of gambling or wagering only on sporting events. In 2002, two Internet gamblers sued credit card companies after running up debts by betting on casino games. The 5th U.S. Circuit Court of Appeals dismissed the case, saying that the Wire Act only applied to sporting events.

However, the U.S. Justice Department saw things differently and claimed that the Wire Act relates to all forms of Internet gambling. The operators of Casino City, a website portal to online gambling sites, sued the Justice Department in 2004 and the U.S. District Court for the Middle District of Louisiana dismissed the case. The court said, "The government's interest is specifically directed towards the advertising of illegal activity, namely Internet gambling."

In 2006, more legislative steps were taken with the Unlawful Internet Gambling Enforcement Act, which prohibits Americans from using credit cards, checks, of electronic funds transfers to finance Internet gambling. But the act deals only with how the gaming accounts are funded, not whether the actual betting is legal or not. So Lawrence Walters, an Internet gambling law attorney, stated that the bill has no impact on an individual gambler’s activity. "The bill is centered on restricting certain financial transactions," Walters said, "requiring that banks identify and block transactions going through their servers and their systems, and requiring that the actual sites, the Internet gambling sites, stop and block these transactions."

Rep. Barney Frank sought to legalize Internet gambling in 2007 by introducing the Internet Gambling Regulation and Enforcement Act. Rep. James McDermott introduced a companion bill, the Internet Gambling Regulation and Tax Enforcement Act, which deals with how to regulate online betting sites and how to collect a tax on all wagers made. McDermott said that an independent accounting firm had estimated that if Internet gambling is regulated, the United States could take in $3.1 billion to $15.2 billion in the first five years, and anywhere up to $42.8 billion in the first 10 years.

Foreign influence has come to bear on the issue as well, with Antigua and Barbuda, members of the World Trade Organization, saying that the U.S. ban on Internet gambling violates their rights at W.T.O. members. The organization ruled in favor of the two countries, the U.S. appealed the ruling, and the W.T.O. has continued to uphold the ruling. Last December the W.T.O. awarded Antigua and Barbuda $21 million in trade sanctions, which will allow the country the right to penalize U.S. trademark and copyright laws.

The U.S. has made some minor trade concessions to some other countries to exclude gambling services from an agreement signed in 1994 by revising the original agreement.

Because of these legislative battles, the issue of the legality of Internet gambling isn’t quite clear to most people, although it is currently illegal. But no arrests have ever been made in the United States for simply placing bets online. And with the W.T.O. ruling last December, that will probably not change anytime soon.