What are the Key Federal Gambling Laws?
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There are a number of federal laws which can impact gambling—not surprising, since there are a large number of federal laws generally. By “federal laws,” we mean laws applicable to all 50 states and all U.S. territories or districts (i.e., Puerto Rico, the U.S. Virgin Islands, Guam, or D.C.). These laws form an extra “layer” or regulation on top of state gambling laws, since most gambling regulation in this country is done at the state level. Since you can be guilty of illegal gambling for violating either federal or your state’s law, you have to check your state’s gambling law(s), as well.
But most of these laws don’t require much scrutiny or thought other than by gambling law attorneys and their clients (people wanting to set up gambling or being charged with illegal gambling). That’s because they—
- Are general criminal laws which simply happen to have applicability to illegal gambling operations, like the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO), which is used against criminal “conspiracies”—mostly organized crime—or the Illegal Money Transmitting Business Act of 1992, which is used to block money laundering; or
- Cover specialized situations, like the Gambling Ship Act (gambling on a boat); or
- Apply to actions which most people will not become involved in, like the Interstate Transportation of Wagering Paraphernalia Act (which makes it illegal to send tools, materials, or supplies used in bookmaking or certain other specified forms of gambling from one state to another).
In short, the average Joe or Jane Citizen has little to worry about with most of the federal laws that related to gambling. But there are two laws which have broad reach which affect online or internet gambling—and until very recently, there was a third law which banned sports betting or wagering. The three principal federal laws that address gambling are:
- the Wire Wager Act (or simply the Wire Act), which bans interstate online sports betting and which previously was held to ban all interstate online gambling;
- the Unlawful Internet Gambling Enforcement Act (UIGEA), which makes it illegal to accept payments for any internet gambling not specifically authorized or made legal; and
- the Professional Amateur Sports Protection Act (PAPSA) of 1992 which used to ban all sports betting in 46 of 50 states (overturned by the U.S. Supreme Court in a 6-3 decision).
The federal government also carved out laws that recognize gambling done by federally recognized Indian tribes.