Why the Legalization of Online Gambling in The US Is still Groundbreaking?
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The road to the complete legalization of online sports betting and online casino gaming activities in the United States has been a bumpy one. Today, many forms of gambling in the United States are legal even though at the same time there are many restrictions in place regarding online gambling and interstate gambling activities. In this sense, every state in the US is one hundred percent free to prohibit or allow some of all gambling activities within their borders.
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When it comes to sports betting activities, the PASPA (Professional and Amateur Sports Protection Act) from 1992 outlawed such activities nationwide with just several exceptions including Montana, Delaware, and Oregon where sports lotteries were allowed and the state of Nevada where sports pools were allowed.
Many years later in May of 2018, the United States Supreme Court ruled that the Professional and Amateur Sports Protection Law conflicts with the Amendment X of the United States Constitution. In other words, in May of 2018, the PASPA was declared unconstitutional. Then, there is the Federal Wire Act from 1961 which fully outlawed interstate betting on sports while other gambling forms were not addressed. In other words, the Federal Wire Act prohibits several forms of betting activities in the USA.
When discussing the legality of gambling activities in the United States, we have to mention the UIGEA (Unlawful Internet Gambling Enforcement Act) from 2006 according to which financial transactions that involve iGaming services including online casino gaming providers are illegal. Today, the situation is quite different as many states have legalized some or all forms of online gambling activities including California, Delaware, Illinois, Indiana, Iowa, Nevada, New Hampshire, New Jersey, Pennsylvania, Rhode Island, and West Virginia.
- The Professional and Amateur Sports Protection Act prohibited all states from legalizing and offering sports betting except Nevada. The Supreme Court ruled it unconstitutional in 2018.
- The Unlawful Internet Gambling Enforcement Act prohibits all US financial institutions from accepting and processing transactions aimed at unlicensed and unregulated sites
- The Interstate Wire Act from 1961 outlawed all sorts of interstate betting on sports while other forms of gambling were not addressed
Legal Online Gambling in the United States
As mentioned in the previous section, there are three major pieces of legislation which concern the online gambling industry in the United States. The process of legalizing online gambling activities started back in 2013 when Delaware and New Jersey launched iGaming sites and Nevada launched an online poker site. As expected, online gambling legislations vary from one state to another, but in all states casinos owned by billionaires are co-owners of the online gambling businesses as well.
At the same time, legal online gambling activities are becoming a reality across many different states. This does not come as a surprise considering that many states have legalized horse betting many years ago. More recently, individual states have taken steps to legalize other forms of online gambling and betting activities including lotteries, fantasy sports, poker, and casino games.
After the United States Department of Justice in 2011 released a document according to which the Wire Act just applies to wagering on sports but not to other gambling forms, it was finally made possible for states to take steps towards legalizing as well as regulating other online gambling forms. As previously mentioned, the very first to get on board were Delaware, Nevada, and New Jersey.
The state of Pennsylvania hopped on the bandwagon in 2017 while West Virginia and Michigan followed in 2019 and 2021 respectively. Back in 2018, the United States Supreme Court decided to strike down the nationwide prohibition on sports betting which led to West Virginia, Pennsylvania, New Jersey, Delaware, Mississippi, and several other states introducing their legal sports betting markets.
In 2019, the United States Department of Justice decided to go back to its original Wire Act interpretation according to which this federal law applies to sports betting as well as other forms of gambling. While this most certainly complicated things for states looking forward to legalizing some or all forms of online gambling, it has not stopped them from taking the right steps in that direction.
The Future of the iGaming Industry in the United States
All things considered, the legalization of online gambling activities in the United States is still groundbreaking especially considering the fact that the growth of the iGaming market in the United States is becoming a lead figure for other countries in the world where such activities are yet to be legalized. When discussing the future of the online gambling market in the USA, it looks rather bright considering that major iGaming operators have already joined this thriving industry.
At the same time, many other companies will enter the market which as estimated recently is valued at around $33 billion. With over twenty states that have already legalized some forms of online gambling and sports betting, the iGaming market in the United States is expected to grow at a massive rate of over 14% in the following five years. Tax earnings alongside other profits added to the equation will most certainly inspire other countries to take steps towards legalizing iGaming activities within their borders.
