Online Gambling: A Lost Cause? (1 of 8)

Online gambling is an area of law which has seen technology evolve quicker than it can adapt. States vary on their views of online gambling and the gravity of its offense. Although federal legislation exists in this area, I will be covering online gambling from the state perspective in this post. This series of blogs will examine various issues such as the Department of Justice’s crackdown on online poker, the gambling community’s response to crackdowns, an examination of federal legislation, and seizing domain names.

Only a hand few of states have explicitly codified online gambling: Illinois, Indiana, Louisiana, Montana, Nevada, Oregon, South Dakota, and Washington. Other states have extended their current statutes to encompass online gambling. For example, in Oklahoma a police officer was indicted of participating in illegal gambling activities and violating the state’s Anti-Gambling Act by using his computer for online gambling.  [1] Prior to the passing of the Unlawful Internet Gambling Enforcement Act of 2006[2], regulation was up to the states. They decided what forms, if any, were legal. Some more conservative states like Utah have made all forms of gambling illegal; meanwhile states like Nevada view it as a source of commerce. The level of enforcement was completely up to the states.

What’s interesting to examine is the ability to regulate an action that is taking place outside of a government’s borders. Many of the online gambling servers are located outside the U.S. When a state explicitly outlaws online-gambling, what recourse do they have to enforce this and limit the ability to do so? A Kentucky judge in one case allowed the state to seize 141 gambling-related domain names because of its conflict with state law. [3] The judge must have not understood the international implications and problem the ruling caused. This would allow internet domains to be seized because of conflict with state law, without regard to the location of these domains and seizure would affect individuals who are not in the U.S. The Interactive Gaming Council, Interactive Media Entertainment and Gaming Association, Inc. got involved and were successfully able to challenge the previous ruling. The Electronic Frontier Foundation challenged this on Constitutional grounds along with the ACLU of Kentucky. [4] Referencing the state’s interpretation of “gambling device” in its statute, the Appellate court said: [I]t stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a “machine or any mechanical or other device … designed and manufactured primarily for use in connection with gambling.”

Should the legality of gambling be a state decision or federal? Is cracking down on online gambling a lost cause? In the Florida, a person who wants to gamble can still go to the different Indian reservations that have casinos or even poker rooms like the Ocala Poker room. If certain cities, you can even take a casino cruise for the night and gamble your life away. It seems the illegalization of online gambling and gambling as a whole is a symbolic illegality, premised in the morality of the activity. States are pushing to legalize gambling for various reasons. With the state of the economy, some states are pushing to legalize to attract revenue. Senatory Raymond Lesniak (D-Union) of New Jersey said “Online gaming will be a huge boost for the casino industry,” Lesniak said. “It can also be a temporary savior for our horse racing industry until we get sports betting at our casinos and race tracks.”[5] Attempts at legalizing online gambling have fallen short at the desk of their governor. Similarly, Washington, D.C. has made a move to legalize online gambling.[6] Officials rather residents gamble from their home in D.C. rather than have them travel to the neighboring states to gamble and miss out on revenue opportunities. “States had looked at [legalizing online gambling] haphazardly and not very energetically until the Great Recession hit, but now they’re desperate for money,” said I. Nelson Rose, who specializes in gambling issues at Whittier Law School.[7] Two California state senators estimated that allowing Internet gambling inside the state could raise about $1.4 billion to $2 billion over 10 years.

With the Department of Justice making sweeping moves against the online gambling community, we will see just how far states will be able to legalize online gambling. Is the DOJ overstepping its boundaries or should the federal government decide who hits the jackpot?

 

Click on the State Name to Jump to its Gambling Statutes

State

Dominant Factor Test Applied

Social Gambling Allowed

Penalty for Simple Gambling

Penalty for Aggravated Gambling

Express Internet Prohibition

Alabama

Yes

Yes

Misdemeanor

Misdemeanor

No

Alaska

Yes

Yes

Misdemeanor

Felony

No

Arizona

No

Yes

Misdemeanor

Felony

No

Arkansas

No

No

Petty

Misdemeanor

No

California

Effectively, Yes

Yes

Misdemeanor

Misdemeanor

No

Colorado

Questionable

Yes

Petty

Misdemeanor

No

Connecticut

Yes

Yes

Misdemeanor

Misdemeanor

No

Delaware

Questionable

Yes

Misdemeanor

Misdemeanor

No

Dist. of Columbia

Yes

Probably

Felony

Felony

No

Florida

No

$10 Limit (1)

Misdemeanor

Misdemeanor

No

Georgia

Yes

No

Misdemeanor

Felony

No

Hawaii

Yes

Yes

Misdemeanor

Felony

No

Idaho

Yes

No

Misdemeanor

Misdemeanor

No

Illinois

No

No

Misdemeanor

Misdemeanor

Yes

Indiana

Yes

No

Misdemeanor

Felony

Yes

Iowa

No

No(2)

Misdemeanor

Misdemeanor

No

Kansas

Yes

No

Misdemeanor

Felony

No

Kentucky

Yes

Yes

Misdemeanor

Felony

No

Louisiana

No

Yes

Misdemeanor

Felony

Yes

Maine

Yes

Yes

Misdemeanor

Felony

No

State

Dominant Factor Test Applied

Social Gambling Allowed

Penalty for Simple Gambling

Penalty for Aggravated Gambling

Express Internet Prohibition

Maryland

No

No

Misdemeanor

Felony

No

Massachusetts

Yes

Unclear

Misdemeanor

Misdemeanor

No

Michigan

Yes

No (3)

Misdemeanor

Misdemeanor

No (4)

Minnesota

Yes

Yes

Misdemeanor

Misdemeanor

No

Mississippi

Yes

No

Misdemeanor

Misdemeanor

No

Missouri

Yes

No

Misdemeanor (5)

Felony

No

Montana

Questionable

Yes

Misdemeanor

Misdemeanor

Yes

Nebraska

Yes

No

Misdemeanor

Misdemeanor

No

Nevada

Yes

Yes

Misdemeanor

Felony

Yes

New Hampshire

Yes

No

Misdemeanor

Felony

No

New Jersey

Yes

Yes

Misdemeanor

Misdemeanor

No (6)

New Mexico

Yes

Yes

Misdemeanor

Felony

No

New York

Yes

Yes

Misdemeanor

Felony

No

North Carolina

Yes

No

Misdemeanor

Misdemeanor

No

North Dakota

Yes

Yes (7)

Misdemeanor

Felony

No

Ohio

Yes

Yes

Misdemeanor

Felony

No

Oklahoma

Yes

No

Misdemeanor

Felony

No

Oregon

Yes

Yes

Misdemeanor

Felony

Yes

Pennsylvania

Yes

Unclear

Misdemeanor

Misdemeanor

No

Rhode Island

Yes

No

Misdemeanor

Felony

No

South Carolina

Yes

Yes

Misdemeanor

Misdemeanor

No

South Dakota

Yes

No

Misdemeanor

Misdemeanor

Yes (8)

Tennessee

Questionable

No

Misdemeanor

Felony

No

State

Dominant Factor Test Applied

Social Gambling Allowed

Penalty for Simple Gambling

Penalty for Aggravated Gambling

Express Internet Prohibition

Texas

Yes

Yes

Misdemeanor

Misdemeanor

No

Utah

Yes

No

Misdemeanor

Felony

No

Vermont

Questionable

Fine Only

Misdemeanor

Misdemeanor

No

Virginia

Yes

Yes

Misdemeanor

Felony

No

Washington

Yes

Yes

Misdemeanor

Felony

Yes (9)

West Virginia

Yes

No

Misdemeanor

Misdemeanor

No

Wisconsin

Yes

No

Misdemeanor

Felony

Yes

Wyoming

Yes

Yes

Misdemeanor

Felony

No

Footnotes:
(1)  Florida authorized licensed card rooms to offer poker limits of $2 per bet, with a limit of 3 raises per betting round, effective July 1, 2003.
(2)  Iowa permits social gambling, but only to the the extent that a player may win or lose no more than $50 or other consideration equivalent thereto in all games and activities at any one time during any period of twenty-four consecutive hours or over that entire period.  See Iowa Code 99B.12(1)(g)
(3)  Michigan has exceptions for Senior citizens homes and state fairs.
(4)  In 1999 Michigan adopted SB 562 which added Section 750.145d to the Michigan Compiled laws.  That section made it specifically unlawful to use the Internet to violate certain provisions of Michigan’s anti-gambling laws (Mich. Complied Statutes 750.301 through 750.306 and 750.311.)  In 2000 Michigan adopted Public Act 185 which repealed the references in Section 750.145d to those anti-gambling sections.  Thus, Michigan is not a state that has in effect a specific prohibition against using the Internet to make, offer or accept bets over the Internet.
(5)  Missouri’s felony penalty applies only to a “professional gambler” as defined.
(6)  New Jersey Senate Bill 1013 seeks to clarify definition of illegal gambling to address Internet gambling; void credit card debt incurred through illegal gambling; authorize only the State to recover illegal gambling losses and to outlaw online gambling.  Also introduced in previous legislative session as S2376.  As of July 4, 2005, S1013 has not been reported out of the New Jersey Senate Wagering, Tourism & Historic Preservation Committee.
(7)  North Dakota has a limitation of $25 per individual hand, game or event.  Betting over $25 is an infraction and it becomes a misdemeanor when the amount exceeds $500.
(8)  South Dakota’s prohibition applies to those in the “gambling business.”
(9)  Prohibition becomes effective June 7, 2006.

 

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~ by davidghassan on October 17, 2011.

One Response to “Online Gambling: A Lost Cause? (1 of 8)”

  1. Just to start, I wanted to point out that I think your title is rather appropriate for the concept and activity of online gambling; “a lost cause”. I think it really captures how the fight against online gambling, regulation, and personally trying to restrict online gambling addiction might as well be “lost causes”.

    In your blog post, you mentioned the idea that government officials are attempting to regulate actions taking place outside of government’s borders. It’s interesting to frame it this way when it seems as though most of the legislation and regulation is here within the United States–or at least that’s where the main focus on regulating online gambling lies. But, in reality, people are online gambling all over the world, and with the ease and facilitation of the internet, are able to expand their base for opponent players and game venues. In addition, you noted that a majority of gambling servers are located outside the United States. This is just fascinating to me. I would definitely question the same as you did. “When a state explicitly outlaws online-gambling, what recourse do they have to enforce this and limit the ability to do so?” It seems to barrel down to the idea that the United States has the resources and authority to regulate almost everything–the internet included.

    After reading your blog post, I couldn’t quite wrap my finger around the answer to this question: how is it possible to seize a gambling related domain name? I hope someone can offer me an answer at some point during this course. I don’t have a lengthy internet or tech-based background, but I just don’t understand how the government could go about doing this. There’s our First Amendment right, the fact that online gambling is minimally prohibited throughout the 50 states, and domain names aren’t United States-based only. Individuals from around the world are able to create these online gambling related domain names and probably could even create the site giving a false location for start up. Again, I don’t have the greatest technology background, but this just doesn’t sit well with me. In your blog, you also mentioned constitutional consequences. Other than the First Amendment, how does online gambling violate or the regulation of online gambling domain names infringe on our fundamental constitutional rights?

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