United States

The Wire Act was enacted in 1961 to prevent bookmakers from accepting sports bets over the telephone. Accusations of Wire Act violations are usually accompanied by other charges, including conspiracy, money laundering, and violations of the RICO Act, Travel Act, and Illegal Gambling Business Act. Enforcement of the Wire Act is directed at the gambling operator, and there is no language that makes it illegal for a consumer to place a wager.

Because the Act was written in 1961 its language is limited to communication systems that use "wires," and the types of betting it describes are limited to fixed-odds propositions such as are offered on sporting and other events. It simply was not possible to have foreseen remote casino and poker games as far back as 1961, so taken literally, the language of the Wire Act is not adequate to apply to casino gaming and poker over the Internet. In a case involving online gamblers who tried to get their credit card debts ruled unenforceable because their online casino gambling had been illegal, the US Court of Appeals for the Fifth Circuit (Louisiana) declared in 2002 that the gambling losses were indeed enforceable because "the Wire Act does not prohibit non-sports Internet gambling."

The DOJ disagrees with the Fifth Circuit Court of Appeals decision, and the Wire Act still serves as the foundation for all of the DOJ’s arguments against the legality of Internet gambling for both sports wagering and non-sports wagering. DOJ officials have asserted this belief several times before Congress since 2002. The DOJ has also asserted this belief when advising the US Virgin Islands and the states of Nevada and North Dakota against regulating online gaming and when threatening media companies who advertised for online gambling companies with prosecution for aiding and abetting an illegal activity in 2003.

The DOJ was successful in convicting Jay Cohen, president of World Sports Exchange, for Wire Act violations in 2000.

Internet gambling on horse racing is permitted by the Interstate Horse Racing Act in states that have chosen to regulate such wagering. Although the DOJ insists that the Act is not consistent with the Wire Act it has never filed charges against any of the many domestic remote horse race wagering operators.

Nevada legislators have passed a law permitting intrastate Internet wagering but have taken few steps to introduce a system. Such a system would require technology that can sufficiently verify a player’s age and location. The DOJ has also said that such a system would violate federal law.

In fall 2006 the United States enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), which makes it illegal for financial institutions to facilitate payment transactions between offshore gambling operations and American customers. The law says nothing about it being illegal for a person located in the US to gamble on an Internet site. The Federal Reserve and the US Treasury are now in the midst of drafting the regulations under which this new law will be enforced.

Officials from the US Treasury and the Department of Justice published 52 pages of proposed regulations to enforce the UIGEA in October 2007. The UIGEA has resulted in the online gambling industry’s publicly listed companies withdrawing from the American market, while many of the private companies continue to serve it.

The law compels financial firms that participate in designated payment systems to implement policies and procedures designed to halt payments to gambling businesses in connection with unlawful Internet gambling.

Certain participants in designated payment systems would be exempt from the proposed rule because the government questions the practicality of these participants attempting to identify and block unlawful Internet gambling transactions. For example, participants in automated clearing houses, check collection and wire transfer systems would be exempt, barring a beneficiary’s bank or a bank that is directly involved with an illegal gambling business. The proposed rule also outlines the types of policies and procedures that non-exempt participants in designated payment systems may adopt in order to prevent transactions that are restricted by the UIGEA.

The states of Illinois, Michigan, Indiana, Nevada, Oregon, South Dakota, Washington, and Louisiana have all passed legislation that specifically prohibits unauthorized forms of Internet gambling. All forms of gambling are illegal in Hawaii and Utah.

In April 2008, federal regulators and representatives of the financial services community testified before Congress that any attempts to enforce the UIGEA would result in serious regulatory burdens. A result of the testimony was new legislation introduced by Reps. Barney Frank and Ron Paul, proponents of legalizing and regulating online gaming, that would prohibit the Department of the Treasury and Federal Reserve System from implementing any regulations related to the UIGEA.

In October 2008, the state of Kentucky was granted permission by Franklin County Circuit Judge Thomas Wingate to begin the seizure of gambling websites. In January 2009, the Kentucky Court of Appeals overturned the ruling in a 2-1 decision because domain names are not gambling devices under Kentucky law. Kentucky state officials are appealing the decision to the State Supreme Court. As of 1 June 2010, the UIGEA regulations have been in full effect, though backers of the UIGEA admit that it would be nearly impossible to stop gambling sites that operate in the United States.

In April 2011, Washington, DC passed a law allowing the DC Lottery and Charitable Games Control Board authority to run skill games and games of chance as well as offer games on the Internet. The city hopes to have its online poker site up and running by the end of the year.

On 15 April 2011, the US Attorney for the Southern District of New York unsealed indictments charging 11 people, including the owners of PokerStars, Full Tilt Poker and Absolute Poker, with money laundering, bank fraud and illegal gambling offenses. The companies' domain names were also seized as part of the indictments, and the Department of Justice is seeking a total of $3 billion in penalties from the three sites.

On 23 May 2011, 10 more online gambling sites, including Bookmaker.com, BetEd.com and DoylesRoom.com, had their domains seized by the Department of Justice as part of a sting operation whereby the government operated an undercover payment processing company called Linwood Payment Solutions.

In response to the indictments and domain seizures, several online gambling companies have opted out of the US market, while others have changed their domain names from dot-com to dot-eu or dot-ag.