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Casino Legality Issues

Best Casino selection for every state

Online Poker in America takes a sour turn

The US senate passes a new act, named the SAFE Port Act, on September 30, 2006. This SAFE Act, is aimed at increasing security at US ports surrounding the country. There are at least eleven million containers shipped yearly across the US, with many avoiding inspection. Inspection is the preventive measure taken against terrorists, germs, chemicals, and weapons.

The SAFE Act is involves much more than safety at the ports, but also safety online and online gambling. In the SAFE Act, a portion of the act is geared to protecting US people from gambling. This section is known as the Unlawful Internet Gambling Enforcement Act, which was first passed in 2002. The Federal Wire Act prohibited gambling and gaming on electronic transmissions of sports betting, but this did not include gambling and gaming on the Internet.

The new act, known as the SAFE Act, makes in illegal and unlawful to gamble online. US players are shocked as they are not going to be permitted to gamble, play, or places bets online. The bets and wagers placed by US players last year topped six billion dollars in one year alone. The world wide gaming and gambling industry is going to see a huge down turn in sales, profits and in the industry as a whole.

Online gambling and gaming events are going to be considered for US players, which will then open the door to small games of chance to US players once again. State lotteries, fantasy sports, and even horse racing will continue to be available to Internet users in the US. Exemptions exist for every type of act or law, and the world of gambling and the SAFE Act is no different. The use of a credit card, check, or online money transfers to a gambling or online gaming site is illegal and prohibited. Some online gambling sites have already blocked users in certain states, while online gambling and gaming continues for users in other states.

United States

Electronic transmission of information for sports betting across state lines is prohibited by the Federal Wire Act, The US Court of Appeals for the Fifth Circuit ruled, November 2002. However at the same investigation a lower court ruling, that stated the Wire Act didn’t not prohibit Internet gambling ’on a game of chance, was affirmed.

There are specific laws against online gambling of any kind in some states. Online gaming licenses are not granted currently and without proper licensing owning an online gaming operation is illegal.

July 23, 1998 the U.S. Senate voted of 90-10 for the Internet Gambling Prohibition Act of 1997. But with Jack Abramoff lobbying, the House of Representatives didn't approve the act and consequently it did not become law.

In March 2003, Deputy Assistant Attorney General John G. Malcolm in the testification before the Senate Banking Committee regarded online gambling and special problems it produces. The United States Department of Justice is mainly concerned about online money laundering. The problem of tracing online money laundering transactions is especially difficult due to the anonymous nature of the Internet and the use of encryption.

In April 2004 Yahoo! and Google, two leading search engines in the internet, removed online gambling advertising from their sites. The move followed a United States Department of Justice announcement that, in what some say is a contradiction of the Appeals Court ruling, the Wire Act relating to telephone betting applies to all forms of Internet gambling, and that any advertising of such gambling "may" be deemed as aiding and abetting. In the judgment of the Justice Department’s move critics there is no legal basis for pressuring companies to remove advertisements protected by the First Amendment. As of April 2005, Yahoo! has provided advertising for "play money" online gaming.

In August 2004, Casino City , an online portal for internet gambling sites, sued the US Department of Justice. The complaint alleged, inter alia, that the website’s business - promoting internet gambling - was legal, and requested a declaration from the court that its business was protected by the First Amendment. The U.S. District Court for the Middle District of Louisiana dismissed the case in February of 2005.

In its opinion, the District Court wrote, it is generally known that the First Amendment didn’t protect the right to advertise illegal activity which internet gambling is considered to be. The plaintiff falsely portrayed the image that Internet gambling was legal and therefore plaintiff’s speech didn’t fall within the speech that was protected by the First Amendment. The US Court of Appeals, 5th Circuit, dismissed Casino City’s appeal in January, 2006.

The North Dakota House of Representatives passed a bill to legalize and regulate online poker and online poker cardroom operators in the State, February 2005. In testification before the State Senate, CEO of Paradise Poker, Nigel Payne pledged to relocate to the state if the bill became law. However the State Senate defeated the measure in March 2005. Rep. Jim Kasper, sponsor of the 2005 legislation, is intended to introduce similar bills in the 2007 North Dakota legislative session.

Internet Gambling Prohibition and Enforcement Act, passed by the House of Representatives in July 2006 is aimed at making online gambling transactions more difficult. It prohibits gambling companies from knowingly accepting money from US clients. Only approved in the Senate, this bill will become law.

Also in July 2006, David Carruthers, the CEO of BetonSports, a company publicly traded on the London Stock Exchange was detained in Texas on his way from London to Costa Rica. Previously he and ten other individuals had already been charged in a sealed indictment with violations of US Federal laws relating to illegal gambling. In spite of a United States Appeals court statement that the Wire Act does not apply to non-sports betting, the Supreme Court of the United States previously refused the hear an appeal of the conviction of Jay Cohen, where lower courts held that the Wire Act does make it illegal to own a sports betting operation offering such betting to US citizens.

The BetOnSports indictment alleged violations of at least 9 different Federal statutes, including 18 USC Sec. 1953 (Operation of an Illegal Gambling Business). Carruthers is currently under house arrest on a one million dollar bail bond .

On September 7, 2006 Peter Dicks, SportingBet PLC chairman, while traveling in the United States on business unrelated to online gaming was detained in New York City on a Louisiana warrant. Louisiana is one of the few states that has a specific law prohibiting gambling online.

Other countries

Various forms of online gambling are legal and regulated in many countries, including most members of the European Union and several nations in and around the Caribbean Sea .

The government of the island nation of Antigua and Barbuda , which licenses Internet gambling entities, made a complaint to the World Trade Organization about the U.S. government’s actions to impede online gaming. The Caribbean country won the preliminary ruling but WTO’s appeals body somewhat narrowed that favorable ruling in April, 2005. The appeals decision held that various state laws argued by Antigua to be contrary to WTO agreements were not sufficiently discussed during the course of the proceedings to be properly assessed by the panel. However, the appeals panel also ruled that the Wire Act and two other federal statutes prohibiting the provision of gambling services from Antigua to the United States violated the WTO’s General Agreement on Trade in Services, or "GATS".

Although the United States convinced the appeals panel that these laws were "necessary" to protect public health and morals, the asserted United States defence on these grounds was ultimately rejected because its laws relating to remote gambling on horse-racing were not applied equally to foreign and domestic online betting companies, and thus the United States could not establish that its laws were non-discriminatory. Although the Dispute Settlement Body of the WTO recommended that the United States bring the three federal laws into compliance with the GATS, as of the fall of 2006 the United States and Antigua disagreed on the status of the United States’ compliance. The dispute has recently been referred back to a WTO panel to assess the status of compliance.

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