The United States Online Gambling Laws

On this page

• Overview of US Gambling Laws
• US Federal Gambling Laws
• US Gambling Laws by State
• Gambling laws state by state
• History of Gambling Laws in the US

With federal online gambling laws that look like a patchwork quilt, players can't help but feel like they're in a gray area. But that's not all. Since the 2018 Supreme Court ruling, sports betting has become a state issue, resulting in 50 different gambling jurisdictions across the country.

Recently, gamblers have been able to access and enjoy offshore casinos and sportsbooks with little concern about the legality of doing so. There are federal laws that prohibit banks from processing transactions for bets placed and that prohibit the operation of an online gambling business within our borders. But these laws don't really make what the individual gambler did within our borders any less legal. They just made gambling more inconvenient and gave us less protection as consumers.

In many ways, that is still the case. But things seem to be moving in the right direction, at least as far as sports gambling is concerned. For now, we want to give you, our readers, a clearer picture so that you know exactly what laws are on the books. We're going to give you the broad strokes here, and then link you to specific sections on each state. There you will find out what specific betting activities (land-based casinos, racetracks, sports betting, online betting, poker games, etc.) are allowed in each jurisdiction, what specific laws are enforced and to what extent, and what you can look forward to in the near future regarding the gambling legal landscape. In short, we want to keep you informed.

The United States is currently experiencing a vibrant transition in gaming. If you want to stay on top of the options and locations available to you, you've come to the right place. But before you check in with an individual state, let's examine the federal government's perspective.

Overview of US Gambling Laws

Betting is a complicated and confusing subject. We have worked hard to gather all the relevant information and present it in a format that is easy to digest for our readers. We then give them a simple scale to read. The goal is to simplify the details as much as possible. Many users find this helpful in understanding the intricate details.

Although the United States has many different jurisdictions, we can also judge the country as a whole, as there are several federal gambling laws that are still relevant today. Compared to nations such as England, several Caribbean island nations, many Latin American countries, and Australia and New Zealand, many parts of the United States are far behind on the gambling front. And yet, largely because of the lack of truly harsh penalties that might serve as a real deterrent, plus the ability of individual states and tribal reservations to offer any kind of gambling they want, the U.S. doesn't score too badly on our severity scale.

Overwhelmingly strictNot at all strict

The forecast for state gambling revenues looks excellent. Despite having to place bets through shady offshore sportsbooks for now, the movement to legalize more forms of gambling in this country seems to be gaining momentum. With the feds no longer stopping states from offering sports betting, look for this and other forms of gambling to become much more common in the next few years. And remember, every dollar bet and every dollar lost is a dollar that will be taxed.

Legislative Restrictions on Online Gambling

Internet gambling in particular occupies an almost undefinable legal space. Current federal law prohibits the operation of an online casino or sports book from within the United States. Federal law also prohibits the processing of transactions between U.S. citizens and known gambling operations. Yet very little is said, in law or in public discourse, about individual citizens who gamble online.

Even the Federal Wire Act of 1961, which technically makes betting over a wire or the Internet a crime, only applies to betting on sports, not other forms of gambling. So while there are some laws in place, a U.S. citizen betting on sports with an offshore bookmaker or playing in an online casino has almost nothing to worry about from a legal standpoint. Here are some of the most important federal laws dealing with online gambling:

• Federal Wire Act of 1961
• Robert F. Kennedy enacted this law because he wanted to stop bets from being sent across state lines. Why did he do this? Because he thought it would effectively shut down the organized crime operations that were placing bets all over the country and using Las Vegas for much of the action. This law specifically made it illegal to use a wire to transmit a sports bet, and later a little thing called the Internet became part of the story. But this law does not apply to betting on casino games and other forms of betting
• Unlawful Internet Gambling Enforcement Act;

US Federal Gambling Laws

While gambling has largely been treated as a state's rights issue, there is still a long history of federal oversight of the practice. Most of the current laws were enacted with the intent of curbing organized crime in an earlier, pre-internet age, when online gambling wasn't even on the drawing board. Since gambling was a major source of income for the Mafia, these laws were used to catch and convict various mobsters, with the RICO Act of 1970 serving as a sort of grand finale.

The U.S. today faces a world changing before its eyes, and a web of what are, in effect, flimsy laws that only partially cover the various forms of gambling that span this country. However, there are some critical pieces of legislation in the joint annals of gambling and American history that you should know about. They are...

• Wire Act of 1961
• A law that prohibits the transmission of sports bets across state lines, but only for the entity accepting the bet, not the individual placing the bet
• Travel Act of 1961
• Same as the Wire Act, only it deals with going across state lines with the picks or bets instead of wiring them.Interstate Transportation of Wagering Paraphernalia Act of 1961
• This is also related to the Wire Act, but now in reference to the machinery and implements of bookmaking, such as computer disks and betting slips;
• Illegal Gambling Business Act of 1970
• This legislation targeted the Mafia. It also targeted illegal casinos. These casinos operated in states without legalized gambling
• Racketeer Influenced and Corrupt Organizations Act of 1970;

None of these laws deal specifically with an individual placing bets online. They all deal either with organized crime and the illegal movement of money, or with the larger operations themselves. But when it comes to betting on an offshore site, a person in the US can do so with little fear of repercussion. Why is that? Because these laws do not directly affect the individual bettor with an offshore account.

Murphy v. National Collegiate Athletic Association

In 2011, New Jersey passed a referendum that would eventually end illegal sports gambling in the state. The Garden State was then sued by the NCAA, with all of the major professional sports leagues eventually joining the suit. The leagues pointed out how the state's new law violated PASPA, which both the U.S. District Court and the U.S. Court of Appeals for the Third Circuit sided with. And that left the next appeal to be heard by the highest court in the land.

Finally, on May 14, 2018, the Supreme Court delivered its verdict. The justices unanimously agreed that the 1992 law signed by President Bush, called the Professional and Amateur Sports Protection Act, was unconstitutional. The law, the Court said, violated the anti-commandeering doctrine of the Tenth Amendment by preventing states from passing their own laws regulating gambling. Moreover, because four states had already established some form of legal sports gambling, and because the federal government must treat all 50 states equally, the Court found that the Act could not stand.

This allowed states to choose the approach they wanted to take and flooded them with options that could be heavily regulated or lightly regulated. Next, we will look at how many states choose to embrace this recreational pastime. It is expected to spread across the country with great speed, not unlike what happened with medical marijuana not too long ago.

US Gambling Laws by State

What makes the U.S. unique is that in addition to having largely weak federal laws governing gambling, the country is made up of fifty different gambling jurisdictions. Each state has its own laws regarding the legality of everything from racetrack betting to online poker to casino gambling. When it comes to the overall confusing state of gambling in the US, each state is much clearer about what it will and won't allow.

The status of gambling in this country is somewhat inconsistent. We see it becoming much more available, but almost in a haphazard way, as some states choose to allow it and others refuse. The federal government, under various administrations, hasn't done much to encourage or discourage gambling, leaving it up to the states. This ambiguous federal stance, combined with recent state's rights rulings, means that we're seeing new forms of legal gambling popping up in a number of states. From now on, when you hear about a new form of online gambling becoming available in this country, it's almost always referring to a new site launched in a state that has chosen to legalize it. And if you ask most people, they'll probably tell you that the types of options available to players in this country right now are mainly just the kinds of games you can play at a casino.

How State Gambling Laws Affect You

Currently, state gambling laws determine how easy or difficult it is to place a bet. They can't stop you from accessing the Internet and using foreign bookmakers, but you shouldn't expect them to make betting any easier. Take, for example, going through the steps necessary to get money in and out of your betting account. That's where the lack of legal online gambling really ties up your money. Your options are to use bitcoin or certain other means to get money into and out of your account. Both options have their own challenges.

The whole process is just a lot easier and simpler in states where gambling is legal. You can walk into a casino or sports book with a wad of cash, or you can place your bets through a sports betting app. You also have a million ways to get your money to the casino or the app. Almost every state now has liquor control and state police departments that are happy to oversee and protect the funding and betting, just as they do for the lottery.

As more states pass laws allowing sports betting, gambling is becoming more accessible and safer for people. After New Jersey led the way in 2018 and several other states followed suit by allowing local casinos to take sports bets, states soon began to reap tax revenues from the new form of legal gambling. Those revenues are expected to grow rapidly as more and more people in more and more states place bets on the outcomes of sporting events. After all, it is still the same bet. It is just that, in many cases, the electronic platform used to place that bet is across state lines.

History of Gambling Laws in the US

The Colonial US

Before the United States declared its independence, it was a series of colonies owned by the British. In the early years of the country, during the 18th and 19th centuries, lotteries were created to help raise revenue. They sponsored the creation or improvement of many educational institutions, including many that we still know today.

1776

The Continental Congress created a five-million-dollar lottery, which helped finance America’s Revolutionary War.

1790

The Northwest Territory Act was passed. It stated that the punishment for the gamblers would take place, and it would be the last time that the treaties related to the gambling debts would hold any water.

1806

All forms of gambling were made illegal by Louisiana, with one exception: New Orleans itself. By restricting all forms of gambling to this single location, officials helped fuel a gambling boom in the city.

1814

A law prohibiting gambling was passed in the Missouri Territory, making all table games illegal.

1815

New Orleans began taxing and licensing their local casinos, using the revenue to fund charity works.

1830

All lotteries were banned in the United States.

1851

New York passed a law requiring the destruction of all gambling devices and the payment of a fine by anyone operating a gambling establishment. These laws were enacted after the New York Association for the Suppression of Gambling was formed.

1861

Gambling was banned in Nevada by James Warren Nye. It was made a territory. Fines were severe and jail time was certain. So were the places where gambling took place. He had a hard time convincing the voters. They didn't want to be told they couldn't gamble.

1862

Kentucky and Missouri became the only states not to ban lotteries.

1895

Gambling or operating a gambling house was made a criminal act and prohibited by the Florida legislature.

1908

Horse racing was banned in almost every state.

1910

Kentucky and Maryland were the last two states left with legal horse racing.

1913

Pari-mutuel betting was legalized in New York.

1931

After the stock market crash of 1929, Nevada took an important step toward recovery along with the Hoover Dam project: it legalized commercial gambling. And while that might seem like an odd, low-tech way to attract big-time investors at the onset of the Depression, it eventually turned the state into a shiny, high-stakes destination-one with enough revenue to pay for roads, schools, and other public works.

1940

New York State’s Racing Commission began licensing pari-mutuel betting at horse tracks.

1945

Nevada passed a law taxing gaming revenue.

1951

The Johnson Act was passed by Congress and made it illegal to transport and possess gambling devices in states where gambling was not legal and where the importation of such devices had not been made legal.

1955

The Nevada Gaming Control Board was formed.

1961

In 1961, Robert F. Kennedy passed the Wire Act, the Travel Act, and the Interstate Transportation of Wagering Paraphernalia Act. These laws were primarily aimed at disrupting bookmakers and organized crime, and they were largely successful.

1964

New Hampshire re-established the state lottery.

1967

The Corporate Gaming Act was passed. This allowed publicly-traded corporations to own casinos.

1971

Off-track betting was legalized in New York State.

1972

Montana legalized low-limit gambling.

1975

The lottery was re-established in New York.

1976

Gambling was legalized in New Jersey.

1988

The Indian Gaming Regulatory Act was passed, allowing tribal reservations to establish their own gambling facilities, even in states where gambling was otherwise illegal.

1989

South Dakota legalized gambling in the city of Deadwood exclusively. Riverboat gambling was legalized in Iowa and Illinois.

1990

Gambling was legalized in Colorado, but contained to only the towns of Black Hawk, Ripple Creek, and Central City.

1991

Riverboat gambling was legalized in Lousiana and Missouri.

1992

The Professional and Amateur Sports Protection Act was signed into law by President Bush, creating a federal mandate making sports betting illegal in all but four states.

1993

Thirteen states had legal casinos in operation, thirty-five had state lotteries, and thirty-eight offered off-track betting.

1994

Missouri legalized casino gambling in the state.

2006

The Unlawful Internet Gambling Enforcement Act of 2006 was passed, regulating online gaming.

2018

The 1992 PASPA law was struck down by the Supreme Court, making sports gambling a states' rights issue and no longer under the authority of the federal government.