Why Is Internet Gambling Illegal In Some States

The UIGEA bill prohibits financial institutions from progressing gambling related transactions via the Internet. This law forced many online poker providers to shut down their US-facing sites due to a blowup of USA friendly deposit methods.

1. The State of Washington is behind the times with gambling laws from a bygone era. Hopefully, this new online gambling app will change things around the state.
2. But one thing is constant: it makes a lot of money. Online gambling industry makes an estimated $1 billion dollars annually. This is a huge business, and a lot of people have cashed in on it. But it has led to some ambiguous legal issues, as the legality of online gambling is constantly being challenged.

I’m a poker player. There was a time when you would have to whisper that fact in hushed tones and make sure you watched who you were talking to. That was before the World Series of Poker was televised nationwide on ESPN, and people generally accepted the fact that there is skill involved in the game. That was before there were personal computers in every pocket and very smart people would try and solve the game with algorithms.

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Did you realize that in the state of Washington it is a Class C Felony to play a hand of poker online for real money? Yes, it is a felony to place an online wager in Washington!

Just to give you some context, here is the explanation of misdemeanors from the Washington State Courts webpage: “Examples of gross misdemeanors are theft of property and driving while under the influence (DUI) of alcohol or drugs. Among the many types of misdemeanors are disorderly conduct and prostitution.”

You got that right. A DUI and prostitution are misdemeanors, while placing a wager online is a felony.

Here’s the thing though, people like to gamble. It’s fun, and it can add a little excitement to a dull day. So I was surprised to read on Geekwire that Muckleshoot Casino is rolling out a new app that has a clever work around this draconian online wagering law.

Here’s how it’s going to work starting in the fall. You download their app to your phone, then physically go to the casino and purchase games with cash money. Then you can leave the casino and play the games anywhere virtually. If you win, you’re winning real money that you collect the next time you’re at the casino.

These won’t be games like poker or roulette, but more like bingo and other games where you’re not playing against the house.

I’m tempted to go on a diatribe on how stupid the state of Washington is for criminalizing an online behavior that is perfectly legal in real life. Instead, I’m going to view this as a positive step.

Hopefully, this will end up in court and the current laws will be thrown out.

Society is slowly losing its judgments about archaic prohibitions from a bygone era. Attitudes are becoming more liberal around the idea of placing a bet for entertainment. Look no further than the recent Supreme Court decision on sports wagering.

Washington state needs to wake up and realize this is a perfectly acceptable tax revenue stream that is no different than ordering your groceries online instead of going to the brick and mortar store. If people want to use their entertainment budget to play a game, isn’t that their business?

Kudos to Muckleshoot for moving this issue forward. Now let’s take the next logical step and allow responsible adults to do online all the things they can legally do in a casino.

You can hear “What are we talking about here?” everyday at 4:45 p.m. on 97.3 FM.

Why Is Internet Gambling Illegal In Some States In America

A three-judge panel disagreed with many of the arguments made by the Interactive Media Entertainment and Gaming Association (iMEGA) on Tuesday as to why the Unlawful Internet Gambling Enforcement Act (UIGEA) should be deemed unconstitutional. In the process, however, internet gambling may now be a states’ rights issue.

The Third Circuit Court of Appeals passed down the historic ruling on Tuesday morning, which included the following text that should be of interest to online poker players: “It bears repeating that the Act itself does not make any gambling activity illegal. Whether the transaction… constitutes unlawful internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e., if it is illegal under that state’s law, it constitutes ‘unlawful internet gambling.’” In essence, internet gambling apparently may be treated the same as brick-and-mortar gambling, which is governed at the state level. As it currently stands, six states have laws on the books outlawing internet gambling to various degrees.

The judges also indicated that the legality of internet gambling also depends on where the company accepting the wager is located: “The Act prohibits a gambling business from knowingly accepting certain financial instruments from an individual who places a bet over the internet if such gambling is illegal at the location in which the business is located or from which the individual initiates the bet.”

The panel, while seemingly clarifying the 2006 law, rejected iMEGA’s claims that the UIGEA was “void for vagueness” and violated First Amendment rights. On the latter point, the court explained that “acceptance of a financial transfer” is not a First Amendment right.

Despite the UIGEA not being overturned as a result of Tuesday’s actions, iMEGA Chairman Joe Brennan told Poker News Daily, “The judges went to pains to clarify that the law did not make internet gambling itself illegal. The UIGEA made no act illegal other than the payment processors taking money. The UIGEA defers to state laws to make the determination.” As long as the bettor and the internet gambling outfit are both located in jurisdictions where the activity is not outlawed, the UIGEA is not violated.

Brennan told Poker News Daily that he had not determined whether iMEGA would appeal the Third Circuit’s decision. It is also unclear whether the U.S. Government would appeal. Still also at issue is the Wire Act of 1961, which some would argue makes online poker and other forms of internet gambling illegal in the United States at the federal level. Brennan explained, “The Wire Act only affects businesses. Is the Wire Act still a problem? Yes, but it doesn’t make it illegal.” A feature by the CBS news program “60 Minutes,” for example, labeled online poker illegal multiple times, even though organizations like the Poker Players Alliance (PPA) contend that the 1961 law does not apply to internet poker.

Why Is Internet Gambling Illegal In Some States Going

The three-judge panel also rejected iMEGA’s claims that the UIGEA violated privacy rights and the Tenth Amendment. The latter asserts, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The Third Circuit instead claimed that as a third party, iMEGA lacked standing to argue the point.

Why Is Internet Gambling Illegal In Some States Still

What effect Tuesday’s decision will have on the internet gambling industry in the United States remains to be seen. Congress returns from session after Labor Day, when the PPA plans to push Barney Frank’s (D-MA) HR 2266, which delays financial services industry compliance with the regulations of the UIGEA by one year to December 1st, 2010. The measure has 35 co-sponsors and was introduced in early May.

iMEGA plans to release additional analysis on its UIGEA challenge later today. Stay tuned to Poker News Daily for the latest poker legislation headlines.