Online Betting Law

On July 28 the House Financial Services Committee released a press release saying they had "passed legislation to enable Americans to bet online and put an end to an inappropriate interference with their personal freedom." This latest legislation was in response to the June 1 deadline imposed on banks and other financial instiituation to block Internet gambling transactions.

Although compliance just began on June 1 of this year, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law in 2006 in an effort to restrict the use of payment systems for Americans who gamble online. The American Bankers Association warned all banks in November last year that they had to comply with the 2006 law by June 1, 2010, and institute policies and procedures to block certain prohibited transactions.

Reporting for the New York Times in July, Sewell Chan wrote that the recent bill to legalize online gambling sponsored by Senator Robert Menendez, Democrat of New Jersey, would "direct the Treasury Department to license and regulate Internet gambling operations, while a companion measure, pending before another committee, would allow the Internal Revenue Service to tax such businesses. Winnings by individuals would also be taxed, as regular gambling winnings are now. The taxes could yield as much as $42 billion for the government over 10 years.... The committee vote was 41 to 22, with seven Republicans joining most Democrats on the panel in favor of the measure."

In response to the implementation of the Act of June 1, some casinos have come up with their own payment systems. At this point it is difficult to say how the 2006 legislation will affect the industry and how soon new legislation will be put in place to legalize Internet gaming for Americans. The new bill has not yet had a hearing.

The issues involved in legislating online gambling are a lot more complicated today than they were 13 years ago when Sen. Jon Kyl (R-Ariz) first introduced the bill known as the Internet Gambling Prohibition Act of 1997. At that time National News reporter David Isaacson had written that online gambling had grown into a 300 million dollar industry and there were about 32 online casino sites.

In his article Chan reported that by some estimates, American online gambling exceeds $6 billion a year. Although this sounds like a lot, it is less than what the industry was making back in 2003, before most online casinos were driven off shore as a result of the 2006 law. In March of 2002, Andy Sullivan of Reuters reported that Christiansen Capitol Advisors estimated gambling sites took in about $2.2 billion in revenues in 2000, and would collect $6.4 billion by 2003. At the time Sullivan wrote his article, there were about 1400 online casinos. In 2003 there were between 1800 and 2000.

The US government has had a long history of trying to determine what to do with Internet Gambling. Back in 1997 the American economy was still booming and dot.coms hadn't yet gone bust but by 2003 advertising revenue from offshore gambling sites had fueled the Internet economy. Internet businesses had been scrambling to stay afloat and the advertising revenue from gambling sites had been too irresistible to refuse.

For the full story, click here

Afraid of breaking the law when betting online? You can be safe when betting here