Online Gambling and Legislation

With more than a trillion dollars changing hands around the world on online casinos alone, sooner rather than later legislation will step in to exercise some form of control in the casino industry. Those measures to control casinos and gambling during the early years worked as the casino had a physical location. Today however casinos have moved online with no real physical location. The question arises how legal are these online casinos?

Gambling legislation has not changed much since Congress passed the Wire Act in 1961. The Wire Act states that "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both." This however only covered sports betting and not casinos. There was also no Internet or Internet casinos during that time.

During 1998 both MasterCard and Visa sued Cynthia Haines for money she lost while gambling on an online casino. She had lost more than US$70,000 to an online casino and could not settle her account with the plaintiffs. She filed a counterclaim well within the state laws of California which prohibited credit card loans for gambling be it online casinos or bricks and mortar casinos. That case was settled out of court. Many states have now enacted their own legislation however casinos have moved their gambling operations off shore to casino friendly countries.

Gambling has increased drastically with the advent of the Internet and online casinos. With huge profits and vested interest in casinos there are also very strong lobbyists in government to keep gambling unimpeded. The Internet Gambling Prohibition Act which was defeated in 2000 shows how much vested interest there is in the casino and gaming industry. Cyberspace is the last frontier when it comes to laws governing casinos. Only time will tell how legislation will catch-up with online casinos and gambling websites.