Online gambling is slowly becoming the most popular form of gambling. Many countries including the UK, Italy, Australia and more have legalized it. Residents of these countries sign in to their online casinos of choice and play their favorite games without fear of going to jail. However, the same cannot be said about the US. For decades, online gambling was prohibited by the Federal Wire Act, also known as the Interstate Wire Act of 1961.
The Federal Wire Act
The act prohibits the transmission of sports and contest bet opportunities, bet payments, and sharing of information that can help one wager on sports or contests through wire communication. The penalty, according to the act, is a fine and or imprisonment of not less than 2 years or both. However, in 2011, the Department of Justice reinterpreted the act stating that The Wire Act, as properly understood, only applies to betting on sporting events and contests.
The interpretation is important because, for a long time, authorities believed that the act prohibited all forms of online gambling such as poker, casino games, lotteries, bingo etc. You can still find slot sites accepting US players but it is still a grey area in some states. The 2011 Memorandum by the Department of Justice also gave individual states the power to formulate their own state gambling laws.
Some states such as Delaware, New Jersey, and Nevada had passed laws that regulate online casinos by 2013. Other states such as Nevada, Delaware, Pennsylvania and New Jersey have legalized online poker. However, banned from interstate business, the online gambling providers could hardly make a profit. Games such as online poker that require a large pool of players were affected most by the interstate ban. Fortunately, in 2017, the interstate compacts were formed, allowing online poker fans from different states to play against each other.
Legalization of online gambling in US is faced by several challenges. In some states, the government officials claim that legalization would negatively affect the land-based casinos in their states. Land-based casino tycoons all around the country are also highly apposed to adoption of online casinos.
In January, the Department of Justice declared that The Wire Act applies to all forms of gambling. If this is implemented, any progress made towards legalizing online gambling in US will be erased. Even with the pending doom, the high gambling revenue generated by New Jersey is serving as fuel to legalize online betting.
In 2018, Pennsylvania became the latest state to legalize online poker. By the end of 2019, the number of states where online gambling is legal is expected double. California is expected to legalize online gambling before mid year.