Legal Issues

 

The elements of gambling are consideration, a result determined by chance rather than skill, and a reward or prize; or, in other words, payment of a price for a chance to gain a prize. In addition, under a statute that prohibits gambling for profit, "for profit" is a necessary element of the offense. Thus, there is no "gambling" unless a participant is required to risk something of value.
                                             - Nevada Attorney General Opinion (Rose, I. Nelson)

 

Is internet gambling legal? What are the governing aspects over this decision? “Gaming operators and patrons have the most immediate concerns, but inquiries have come from developers of gaming software, financiers, Internet service providers, magazines which would like to advertise online gaming, and operators of non-gaming websites, who would like to link with gaming sites." (Rose, I. Nelson) These are important questions that have been coming up more and more often in past years, and have often received ambiguous answers. The legality of internet gambling is a complicated issue, and although I cannot offer a fully educated, legally knowledgeable declaration on the matter, I present answers to general questions about internet gambling, as well as a personal analysis of the situation.

Q: Is internet gambling a matter of communications law or gaming law?

A: We must make the distinction that the legality of internet gambling is a question of gaming law rather than communications law. Communications law deals primarily with the freedom of speech and other civil rights, while gaming law is a commercial matter. Governments worldwide do not even consider civil rights in relation to internet gambling, and law enforcement agencies feel the same way. This position is strongly demonstrated in the Nevada Supreme Court ruling against Frank Rosenthal, who ran the Stardust and three other casinos for the Chicago mafia. The ruling stated that gaming is reserved to the states under the Tenth Amendment and that therefore it finds no room in such decision making for federally protected constitutional rights. Although there are arguments that internet gambling may relate to communications law, we will adhere to the views of the majority of governments and take it to be controlled by gaming law.

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Q: What are the political stances on the legality of internet gambling?

A: On the political spectrum, both Democrats and Republicans have been stumped on the issue due to conflicts of interests. Politicians are put to the task of making a decision that on one hand is a moral one and on the other hand is one that could potentially make or break the traditional gambling market. Pushes have been made toward a solution by lobbyists who represent such groups as the gambling industry, which invests much capital in politicians and their campaigns would be crippled by internet gambling, as would state and municipal authorities that enjoy taxing casinos and lotteries, and even religious groups whose bingo games could be hurt by chances to win on the internet.

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Q: What have federal and state governments done to resolve the legality of internet gambling?

A: Many state governments have taken individual positions on internet gambling. Such states as Louisiana, Texas, Illinois, and Nevada have explicitly banned internet gambling, while other states have left this issue alone. The result in this situation of course is a stalemate, and the tiebreaker must be the federal government. The states can attempt to regulate or prohibit internet gambling all they like, but they cannot stop it completely, as this would require regulation of internet use. Because this problem is on a national or even worldwide scale, the states feel that it is more suitable for the federal government to deal with this issue. The general consensus in both state governments and the United States government is that regulating internet gambling is nearly impossible, so the only solution is to prohibit it completely.

The federal government is tackling the internet gambling problem by attacking not the website itself, but the payment structure of internet gambling. It has been thought in the past that prohibiting internet gambling was impossible because the U.S. government could not control the operations of a company that is located overseas. However, in early March 2006, the United States House panel passed a bill that would prohibit businesses from accepting checks, credit cards, or electronic fund transfers in illegal gambling transactions. This way it does not matter who the site is run by, what country the website's company is located in, or what its purpose is, United States online players would not be able to play on the sites because they would be unable to fund their accounts. Although it is possible for people to open bank accounts overseas and pay for internet gambling with money in those accounts, it is a big hassle for the average online gamblers. Finally, by following through with this act of Congress, the number of people who gamble on the internet will fall significantly with the loss of U.S. bank accounts as sources of funding.

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Q: Why is it so difficult to regulate internet gambling?

A: The largest obstacle to regulation is the global nature of the Internet. Anyone in the world can access any public website. This means that United States citizens can access any public online gambling website no matter where in the world its creators are located. In order to people in the United States from gambling, the U.S. government would have to discourage websites in countries that allow online gambling from allowing the American people from accessing their websites. This is obviously not a feasible possibility.

Furthermore, because the Internet is so large in scale, it would not be cost-effective for Internet service providers to actually track down every message that involves internet gambling. The sheer volumes of correspondences that occur make the job practically impossible. In addition, there is an internet gambling slang that is difficult to decipher and to distinguish from regular conversation.

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My Take on the Legality of Internet Gambling

Looking at the legal history of internet gambling and the prohibition attempts that have been made, it seems as though the battle to prohibit or at least regulate internet gambling is futile. However, I strongly believe that the efforts must persist because the social impacts of internet gambling far outweigh the costs of prohibiting it (see Social Impact). The first step that must be taken by the federal government is to explicitly ban all types of internet gambling that have not yet been legalized in order to prevent them from growing. In the long run, the U.S. government must once again take a leading role in the world and encourage other countries to prohibit internet gambling. This will allow for a happier, safer, and more prosperous global community.

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