State Online Gambling Law: Express Prohibitions

Recapping the last post:

The Justice Department appears to have backed of from enforcing the wire act as it applied to online gambling (other than sports betting), as evidenced by their 2011 letter. While some Congressmen have attempted to pass legislation banning online gambling completely, those bills have been unable to garner enough support to even stand a chance at passing. But where does that leave the state of online gambling law in the U.S.. Well the short answer is no one is really sure. The complex, overlapping regulatory framework has left even gambling law experts baffled. Still, at least one inference may be drawn from the justice department’s recent letter: it appears that the federal government has left the majority of online gambling regulation up to the states. As mentioned in the previous post, some States have used their regulatory authority to enact laws legalizing online gambling. Many states have however taken the opposite approach and enacted express prohibitions on online gambling. This post will examine some of those prohibitions.

 

Washington State:

Although brick and mortar gambling in Washington State is legal to an extant, online gambling is not. In 2006, the Washington legislature amended the Washington Revised Code 9.46.240 (the Gambling Act) to include a ban on all forms of bets or wagers over the Internet from Washington. Not only is it illegal for a person to place bets online from Washington but it is illegal for an internet gambling business to accept bets placed by people in Washington, whether or not the business operates within the state’s borders.

That law was challenged in the case of Rousso v. State.[1] In that case, Rousso, a online gambling enthusiast sought a declaratory judgment that the law impermissibly interferes with congress power’s to regulate interstate commerce, thus violating the Commerce Clause. The Washington Supreme Court affirmed the states authority to regulate internet gambling, finding that the burdens imposed on interstate commerce were not “clearly excessive” in light of the state interests.[2] Washington’s law is uniquely punitive, making the offense of online gambling a Class C felony.[3]

Illinois:

In Illinois’s statute Article 28 Ch. 38, any person who “knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any game, contest, political nomination, appointment, or election by means of the Internet.” However, the law does not prohibit online lottery. In fact, Illinois was the first state to create an online lottery ticket program.

Recently, a bill was introduced in the Illinois legislature that would legalize many forms of online gambling including online poker.[4] According to legal sources, this bill will likely pass in some form. Therefore, online gambling prohibition in Illinois may soon be over.

Nevada:

Nevada has had perhaps the most interesting online gambling law development. In 2001, Nevada passed legislation that legalized all interactive online gaming including internet gambling. Unfortunately for Nevada, Department of Justice still believed that the Wire Act prohibited online gambling and thus the Nevada statute was in conflict with this law. Faced with this pressure, Nevada completely reversed course and became one of the only states that have expressly prohibited online gambling. [5]

Yet the story does not end there. In 2013, Nevada partially reversed its course by enacting legislation legalizing online poker (At the time, Nevada was the only state to have any form of online gambling legalization).[6] More recently, Nevada has made a deal with Delaware to permit individuals in each state to play poker against each other.[7] Under the agreement, both states must adhere to certain regulatory minimum standards.

Next Post

The next post will focus on those states that have enacted legislation legalizing online gambling in some form.

[1] Rousso v. State, 170 Wash. 2d 70, 91, 239 P.3d 1084, 1095 (2010)

[2] Rachel J. Schaefer, Must the House Always Win?: A Critique of Rousso v. State, 35 Seattle U. L. Rev. 1549, 1551 (2012)

[3] Charles P. Ciaccio, Jr., Internet Gambling: Recent Developments and State of the Law, 25 Berkeley Tech. L.J. 529, 550 (2010)

[4] http://www.kleinmoynihan.com/blog/online-gambling-may-soon-be-legal-in-illinois/

[5] Charles P. Ciaccio, Jr., Internet Gambling: Recent Developments and State of the Law, 25 Berkeley Tech. L.J. 529, 550 (2010)

[6] http://abcnews.go.com/US/story?id=93177

[7] http://www.foxnews.com/politics/2014/02/25/raising-stakes-nevada-and-delaware-sign-agreement-to-allow-interstate-online/

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~ by rzlatkin on October 29, 2014.

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