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US Sports Betting Laws:

Is Online Sports Betting Legal?

The question of whether online sports betting is legal in the US can prove to have a very complicated answer. The US Sports Betting Laws do not directly declare that online sports betting is illegal, but have put up restrictions that may create problems for bettors. There is still much disagreement in America regarding the interpretation of these laws, and to obtain a better answer to this question, it is important to look at the laws themselves.

The Internet Wire Act of 1961

This is a federal law that is commonly known as the Federal Wire Act, and it prohibits the operation of certain kinds of betting organizations in the US. It also prohibits interstate sports gambling using a telephone or other wired devices. Since this law was passed before the advent of the internet, there is some confusion over whether this law pertains to placing bets online.

Another question that this law evoked is whether the Federal Wire Act applied to all forms of gambling or only sports bets. The 5th U.S Circuit Court of Appeals, in 2002, made a ruling that dismissing a lawsuit against credit card companies which was brought in by two Internet gamblers. As a part of the dismissal, the court stated that the Federal Wire Act only pertained to wagers on sporting events. However, the United States Justice Department has a different view of the matter, stating that the Act was applicable to all forms of gambling on the internet and some U.S District Courts agree with this. Therefore, the legality of sports betting depends on where you live and how the court interprets the law.

Unlawful Internet Gambling Enforcement Act of 2006

The Unlawful Internet Gambling Enforcement Act of 2006 or the UIGEA is the 8th Title of the SAFE Port Act which came into effect on the 13th of October 2006. The UIGEA prohibits the transfer of funds from financial institutions to any Internet gambling sites. The act however, deals with only the funding of Internet gambling accounts and not the actual act of betting or the player’s activities on these gambling sites. As a result of this act, many e-wallet solutions that are used to fund Internet gambling have stopped accepting members from the US. This act however, allows online betting on horse racing, online lotteries and fantasy sports.

Internet Gambling Regulation and Enforcement Act of 2007

There have been some vehement opponents to the UIGEA, and in the April of 2007, U.S Congressman Barney Frank brought in the Internet Gambling Regulation and Enforcement Act that legalized online gambling. In his view “The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone”. Following this, another Congressman James McDermott introduced a companion bill to Barney Frank’s called the Internet Gambling Regulation and Tax Enforcement Act that regulates the betting sites and the taxation of all wagers.

In conclusion, although sports betting is currently illegal in the US, the many disagreements and confusion with regards to the law makes the legality of this issue open to interpretation. It might be interesting to note that there have been no arrests in the US for only placing wagers online. It is also unlikely that online sports betting will be made legal anytime in the near future.