The Current State of the US Gambling Laws

Though not enshrined in the constitution many Americans feel that the right to gamble should be fundamental. This article tells them where gambling laws in the country currently stand.

Gambling came to America with the European immigrants. Constant attempts have been made by the powers that be, both before and after independence, to erase “the scourge” that is gambling. However, gamblers have always found receptive pockets in the country where they survived and from where they spread out again. By the end of the twentieth century, the laws regarding most forms of land based gambling were settled, with the control in the hand of the state legislatures. Sports betting and online gambling were the problem areas.

What you will find below:

• An overall view of the established forms of land based gambling, which are land based casino, horse racing and lotteries.
• Greater focus on sports betting and on regulated online gambling.
• Legal challenges posed and crossed in the last twenty years.
• The states that have finally regulated online gambling and sports betting.
• The states that are likely to follow suit in the near future.
• Online gambling at offshore sites: pros and cons

Land Casino Gambling In The United States

The Federal Law does not prohibit land casino gambling. It has been left to the states to decide whether or not they should allow this activity. Some states, like Nevada, permit casinos being established anywhere in the state. Some states, like New Jersey, have demarcated regions where they allow casinos. Other states, like Utah, do not permit casino gambling at all.

There are two types of land casinos in the United States.

Commercial Casinos

Commercial casinos are founded and run by private companies. These are regulated by the states as to where they can be located, what forms of casino gambling can be offered and to what capacity (number of gaming tables, slot machines etc.). A survey conducted by the American Gaming Association (AGA) in 2016 reported 460 commercial casinos (excluding card rooms and race track casinos) across 25 states.

Tribal Casinos

This refers to casinos operated by Native Americans on their recognised territories, permitted by the Federal Indian Gaming Regulatory Act of 1988. Ultimately, however, the tribes were required to negotiate a Tribal-State compact with their respective states before they could establish casinos. AGA reported 486 tribal casinos across 29 states, with Oklahoma alone having 127.

Horse Racing In The United States

Only pari-mutuel betting on horse races is allowed in the United States, and it is regulated by the states. Some states restrict betting to race tracks, whereas some states permit off track betting. Initially off track betting was restricted to locations within the state. However, after the Interstate Horse Racing Act of 1978 some states allow race tracks to broadcast their races to other states and accept bets.

28 states have race tracks. 13 states do not have race tracks but permit their residents to bet on horse races of other states.

Lottery In The United States

Lotteries are subject to the state laws and there is no national lottery organization. 45 of the states operate lotteries along with the District of Columbia, Puerto Rico and U.S. Virgin Islands. The states that do not permit lotteries are Alabama, Alaska, Hawaii, Nevada (reason being competition to other forms of gambling) and Utah. Consortiums of state lotteries jointly organize games to increase liquidity and allow for larger jackpots. Two major lottery games, Mega Millions and Powerball, are both offered in nearly all jurisdictions that operate lotteries, and are perceived as national lotteries.

According to the Federal Lottery Law, it is illegal to operate a lottery through the mail or over the telephone (not online). In December 2011, the US Department of Justice opined that the Federal Wire Act applied only to sports betting. Since then six states have permitted online lottery ticket sales. They are Pennsylvania, Michigan, Georgia, Illinois, New Hampshire and Kentucky. Some other states may follow suit.

Online Gambling In The United States

History Timeline Of Online Gambling

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States That Offer Only Retail Sports Betting

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States Likely To Launch Sports Betting Shortly

Daily Fantasy Sports

Daily Fantasy Sports (DFS) constitute an independent chapter in American gambling. DFS contests came to their own around 2007 as a substitute for sports betting. Smartphones and the easy availability of sports data have converted DFS into a billion dollar industry across over 40 U.S. states.

Whether DFS is legal or not is decided by the state. There are three scenarios.

• Some states have legalized DFS and are regulating it just as any other gambling activity. A few of these states tax DFS operators and charge licensing fees. Others do not.
• Some states have not taken any stand on DFS. This allows DFS operators to do business without any regulation from the state.
• A very small number of states have made it expressly illegal.

Some of the key states are discussed below.