| Internet casinos and sportsbooks have grown | | | | comes from American wagers. These companies |
| immensely in popularity over the past several years. | | | | usually provide wire instructions to the gamblers so |
| From playing cards to betting on the Super Bowl to | | | | that the player can wire money into a pre-funded |
| playing roulette, you can literally have Las Vegas in the | | | | betting account before they can begin wagering. |
| comfort of your own home. However, is it legal to | | | | So, the question is, is it legal for an offshore company |
| gamble online? | | | | to run their business offshore but still accept bets from |
| The answer is, yes and no. Currently, the law stipulates | | | | the United States, where online sports betting is |
| that online gambling is illegal, but given the fact that | | | | technically illegal? Yes and no. Theoretically it is illegal, |
| most online casinos continue to operate unfettered, it | | | | but it is very difficult to compel an online sports betting |
| might seem that it is in fact legal to run an online betting | | | | service to shut itself down if they operate under the |
| or casino business. | | | | laws of a foreign government where it is legal. |
| What forms of gambling are available online? Well, you | | | | It is been very difficult for the Department of Justice to |
| can play poker and other card games, you can bet on | | | | enforce the Wire Wager Act when it comes to |
| sports, or you can play games of chance, such as | | | | offshore companies, and the offshore betting business |
| roulette, craps, etc. | | | | continues to get bigger and bigger. In 1998, the sum |
| Betting on sports seems like a perfectly legitimate | | | | total of all internet wagers was estimated at $600 |
| form of online betting - the computer does not control | | | | million, and has grown by 10 or more times that |
| who wins a pro football game. Games of chance | | | | between then and the year 2006. |
| should probably be prohibited. A computerized roulette | | | | The Wire Wager Act was upheld when the U.S. |
| wheel can easily be fixed, resulting in a few winning | | | | Supreme Court, during 2001 and 2002, refused to |
| bets, but enough losing spins to insure the house wins. | | | | review the conviction of Jay Cohen, who had been |
| So, of these activities, which ones are legal? According | | | | running an internet sportsbook based in Antigua. And, |
| to the Wire Wager Act, betting on sports is the only | | | | even though the Department of Justice has said in |
| form of online wagering that is illegal. The Wire Wager | | | | recent years that that the Wire Wager Act also |
| Act reads as follows: | | | | declares online casino games, not just sports betting, to |
| "Whoever being engaged in the business of betting or | | | | be illegal, the Federal Appeals Court has ruled that that |
| wagering knowingly uses a wire communication facility | | | | interpretation is not correct. |
| for the transmission in interstate or foreign commerce | | | | However, in July of 2006, everything changed. On a |
| of bets or wagers, or information assisting in the | | | | vote of 317-93, the U.S. House of Representatives |
| placement of bets or wagers on any sporting event or | | | | voted to ban financial payments to offshore casinos |
| contest, or for the transmission of a wire | | | | as part of the The Unlawful Internet Gambling |
| communication which entitles the recipient to receive | | | | Enforcement Act of 2006 H.R. 4411. The legislation |
| money or credit as a result of bets or wagers, or for | | | | also compels banks and credit card companies to cut |
| information assisting in the placing of bets or wagers, | | | | off payments to the estimated 2,300 gambling sites |
| shall be fined under this title or imprisoned not more | | | | located outside of U.S. jurisdiction. This legislation bans |
| than two years or both." | | | | all forms of internet gambling, including card games and |
| This means that it is illegal for American based internet | | | | sportsbetting. |
| companies to accept bets on sports or other | | | | Ultimately, the U.S. Government is just trying to protect |
| "contests." However, most online gambling enterprises | | | | betters from getting screwed by online casinos that |
| have moved their operations offshore to countries in | | | | accept bets over the internet but do not pay out when |
| Central America and other countries around the world. | | | | someone wins. However, it does not seem fair to |
| It is common for most of these companies to be | | | | allow major casinos that operate in Las Vegas and |
| incorporated in places like Antigua or the Caribbean | | | | Atlantic City to have a monopoly on the betting |
| islands. PartyPoker, the most popular website for | | | | industry. |
| playing poker for money online, is licensed and | | | | Online casinos and sports betting over the internet |
| regulated by the Government of Gibraltar. | | | | should be permitted. The United States simply needs |
| Online sportsbooks, often run by Americans offshore, | | | | to implement a system whereby the online casino |
| still accept bets from Americans, and this is where the | | | | industry is regulated, making it mandatory for these |
| problem arises. Americans are the biggest betters, and | | | | companies to disclose the details of their operations |
| most of the income stream for online sports betting | | | | and apply for a casino or sportsbook license. |