The Legalities Of Online Sports Betting

The Legalities Of Online Sports Betting

What is lawfully accepted in the US online sports betting scene? Is betting different from gambling, and does this affect the existing laws penned to address internet gambling? Let’s quickly look into the information that’s available to date.

Gambling has been an underground and mainstream activity that has got many people hooked for its play of chance and the opportunity to take home plenty of cash with little work. Although it does involve a large amount of cash in the long run, it’s still considered easy money to most especially with the convenience of the internet playing its part.

From horse race betting to baseball game wagers, the advent of the internet has propelled the betting industry into a global sensational matter that has people and lawmakers from various parts of the world debating and filing cases against each other. A few laws have been enacted but instead of setting the record straight, it produced even more confusion not just to the US but to partnering countries as well.

The three known rules in the US that addresses online sports betting are as follows:

US Wire Act

Known as the Interstate Wire Act of 1961, this law prohibits betting and wagering through the use of wired communications among states within the US or receiving money from betting or wagering through the same channel. While it does address the transmission of money for a wired sporting event, it does not directly cover the entire online gambling scope.

It did not cover a lot of bases in the betting field and it caused confusion to many people. As an example, through this act, the US was reported to the World Trade Organization by the small country of Antigua and Barbuda because they believe that their WTO membership rights was violated through the US Wire Act. This complaint won Antigua and Barbuda $21 million.


In 2006, the Unlawful Internet Gambling Enforcement Act was put in place to ban of businesses to accept payments from individuals that result from internet gambling. This affected banks in such a way that they, too, are no longer allowed to process transactions that are associated to internet gambling.

This derailed some businesses and even closed down many. But some stayed strong transacting with the non-US market. The betting retailers that operated in physical sites continued to run its operations as they were not covered by this law.

Internet Gambling Regulation and Enforcement Act

HR 2046, or the Internet Gambling Regulation and Enforcement Act was introduced by Rep. Barney Frank in 2007. This provides licenses to internet gambling facilities by the FCEN (Financial Crimes Enforcement Network) which pushed to the side the UIGEA.

Its goal was to regulate online sports which was eventually followed by Rep. James McDermott’s Internet Gambling Regulation and Tax Enforcement Act that taxed betting outfits, controlling the way they operate and helping the states through the profits earned.

To date, certain states in the US like Nevada, New Jersey, Delaware, California and Pennsylvania have their own online sports betting laws which now allow a certain level of authorized betting within specific places.