Gambling Law: An Overview

Gambling, though widespread in the United States, is subject to legislation at both the state and federal level that bans it from certain areas, limits the means and types of gambling, and otherwise regulates the activity.

In this chapter: (1) 'Bet' means an agreement to win or lose something of value solely or partially by chance. A bet does not include: (A) contracts of indemnity or guaranty, or life, health, property, or accident insurance. The Professional and Amateur Sports Protection Act of 1992 (Pub.L. 102–559), also known as PASPA or the Bradley Act, is a judicially-overturned law that was meant to define the legal status of sports betting throughout the United States.

Does it represent fewer problem gamblers? They may even distort the answers they provide to a surveyor poll if those answers begin to suggest a gambling problem. They are in denial.Also, it could be contested what the leveling-off effect of problem gambling represents. Gambling arguments for and against.

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Congress has used its power under the Commerce Clause to regulate interstate gambling, international gambling, and relations between the United States and Native American territories. For example, it has passed laws prohibiting the unauthorized transportation of lottery tickets between states, outlawing sports betting with certain exceptions, and regulating the extent to which gambling may exist on Native American land.

Each state determines what kind of gambling it allows within its borders, where the gambling can be located, and who may gamble. Each state has enacted different laws pertaining to these topics. The states also have differing legal gambling ages, with some states requiring the same minimum age for all types of gambling, while for others, it depends on the activity. For example, in New Jersey, an 18-year-old can buy a lottery ticket or bet on a horse race, but cannot enter a casino until age 21. Presumably, the age 21 restriction is due to the sale of alcohol in that location.

A standard strategy for avoiding laws that prohibit, constrain, or aggressively tax gambling is to locate the activity just outside the jurisdiction that enforces them, in a more 'gambling friendly' legal environment. Gambling establishments often exist near state borders and on ships that cruise outside territorial waters. Gambling activity has also exploded in recent years in Native American territory. Internet-based gambling takes this strategy and extends it to a new level of penetration, for it threatens to bring gambling directly into homes and businesses in localities where a physical gambling establishment could not conduct the same activity.

Internet Gambling

Federal Regulation

In the 1990s, when the World Wide Web was growing rapidly in popularity, online gambling appeared to represent an end-run around government control and prohibition. A site operator needed only to establish the business in a friendly offshore jurisdiction such as the Bahamas and begin taking bets. Anyone with access to a web browser could find the site and place wagers by credit card. Confronted with this blatant challenge to American policies, the Department of Justice and Congress explored the applicability of current law and the desirability of new regulation for online gambling.

In exploring whether an offshore Internet gambling business taking bets from Americans violated federal law, attention was focused on the Wire Act, 18 U.S.C. § 1084 (2000). The operator of a wagering business is at risk of being fined and imprisoned under the Wire Act if the operator knowingly uses a 'wire communication facility' to transmit information related to wagering on 'any sporting event or contest.' 18 U.S.C. § 1084(a). An exception exists if that act is legal in both the source and destination locations of the transmission. § 1084(b). The Wire Act’s definition of “wire communication facility” appears to embrace the nation's entire telecommunications infrastructure, and therefore probably applies to online gambling. See § 1081.

The Department of Justice maintains that, under the Wire Act, all Internet gambling by bettors in the United States is illegal. U.S. House of Representatives Committee on the Judiciary Hearing on Establishing Consistent Enforcement Policies in the Context of Online Wagers, 110th Cong., Nov. 14, 2007 (testimony of Catherine Hanaway, U.S. Attorney (E.D. Mo.), Dept. of Justice). The Fifth Circuit disagreed, ruling that the Wire Act applies only to sports betting, not other types of gambling. In re MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002).

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which made it illegal for wagering businesses to knowingly accept payment in connection with unlawful Internet gambling (though it does not itself make Internet gambling illegal). 109 Pub. L. 109-347, Title VIII (Oct. 13, 2006) (codified at 31 U.S.C. §§ 5301, 5361–67). It also authorizes the Federal Reserve System to create regulations that prohibit financial transaction providers (banks, credit card companies, etc.) from accepting those payments. See 31 U.S.C. § 5363(4). This Act, along with threats of prosecution under the Wire Act from the Department of Justice, has caused several Internet gambling businesses to withdraw from the U.S. market.

In response, House Representatives introduced multiple bills in 2007 to soften federal Internet gambling law. If passed, the Internet Gambling Regulation and Enforcement Act and the Internet Gambling Regulation and Tax Enforcement Act would license, regulate, and tax Internet gambling businesses rather than prohibit them from taking bets from the United States. Alternatively, the Skill Game Protection Act would clarify the Wire Act to exempt certain games such as poker and chess.

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State Regulation

In addition to federal measures, some states have enacted legislation to prohibit some types of Internet gambling. In 2006, Washington State amended its Code to make knowingly transmitting or receiving gambling information over the Internet a felony. See Wash. Rev. Code § 9.46.240 (2006). Other states with similar prohibitions have made it a misdemeanor instead. See e.g., 720 ILCS 5/28-1 (2007).

States have not been particularly active in enforcing these laws, possibly due to a conflict with the dormant Commerce Clause doctrine. That doctrine theorizes that state law applying to commerce outside the state’s borders is unconstitutional because that power lies with federal, not state, government. In particular, federal preemption has obstructed states’ attempts to regulate gambling activity on Indian reservations within state borders. See Missouri ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d 1102 (8th Cir. 1999). The federal Indian Gaming Regulatory Act, 25 U.S.C. § 29 (2000), governs gambling activity on Indian reservations, but the extent to which it and other federal gambling laws preempt state action in the Internet arena is uncertain.

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Federal Material

U.S. Constitution and Federal Statutes

• U.S. Code: Title 15, Chapter 24: Transportation of Gambling Devices
• U.S. Code: Title 15, Chapter 57, Interstate Horseracing
• U.S. Code: Title 18, Chapter 50: Gambling
• U.S. Code: Title 18, Chapter 61: Lotteries
• 18 U.S.C. §1953 (Interstate Transportation of Wagering Paraphernalia Act)
• 18 U.S.C. §1955 (Illegal Gambling Business Act of 1970)
• 25 U.S.C. §§2701-2721 (Indian Gaming Regulatory Act)
• U.S. Code: Title 28, Chapter 178: Professional and Amateur Sports Protection
• Code of Federal Regulations: Title 25, Chapter 3: National Indian Gaming Commission, Department of the Interior
• Proposed Internet Gambling Prohibition Act of 1997 (not passed)

Federal Judicial Decisions

• Greater New Orleans Broadcasting Association, Inc. v. United States, 527 U.S. 173 (1999)
• Ratzlaf v. United States, 510 U.S. 135 (1994)
• Chickasaw Nation v. United States, 534 U.S. 84 (1999)

State Material

Other References

• '14 Charged in Internet Betting' (Washington Post, March 5, 1998)

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Federal Law Definition Of Gambling Statistics

The Professional and Amateur Sports Protection Act of 1992 (Pub.L.102–559), also known as PASPA or the Bradley Act, is a judicially-overturned law that was meant to define the legal status of sports betting throughout the United States. This act effectively outlawed sports betting nationwide, excluding a few states.

The sports lotteries conducted in Oregon, Delaware, and Montana were exempt, as well as the licensed sports pools in Nevada^[1]. In addition, Congress provided a one-year window of opportunity from the effective date of PASPA (January 1, 1993) for states which operated licensed casino gaming for the previous ten-year period to pass laws permitting sports wagering. The latter exception was clearly crafted with New Jersey in mind. However, New Jersey failed to take advantage of this opportunity. Excluded from the reach of PASPA are jai alai, as well as parimutuelhorse and dog racing.

In a May 2018 decision in Murphy v. National Collegiate Athletic Association, the Supreme Court of the United States ruled that PASPA conflicts with the Tenth Amendment.

History[edit]

On June 26, 1991, the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks held public hearings on sports gambling. It found '(s)ports gambling is a national problem. The harms it inflicts are felt beyond the borders of those States that sanction it.' David Stern, the then-commissioner for the National Basketball Association, testified that 'The interstate ramifications of sports betting are a compelling reason for federal legislation.' In light of these findings, Congress exercised its authority under the Commerce Clause to enact Senate Bill 474 Professional and Amateur Sports Protection Act (PASPA) in 1992, codified at 28 U.S.C. § 3701.^[2]

Legislative efforts against the act[edit]

New Jersey has been a leader, both in legislation and in the legal process, in support of the legalization of sports betting in New Jersey despite its original failure to take advantage of the carve out in the PASPA of 1992. The law is also known as the 'Bradley Act', named for New Jersey Senator and former NBA star Bill Bradley. New Jersey voters in 2011 voted for a state constitutional amendment that would permit sports gambling. The next year, the NJ State Legislature enacted the Sports Wagering Act ('2012 Act'), allowing sports wagering at New Jersey casinos and racetracks.^[3]

Legal challenges[edit]

Proponents of repeal typically assert that the law as written is inherently unconstitutional, as the Tenth Amendment of the U.S. Constitution reserves to the states all rights not explicitly granted to the federal government—such as gambling regulation. While the primarily legal challenge to the law came from New Jersey, other efforts to overturn it had been set in motion before the Supreme Court's decision in May 2018; this included a sports-betting bill being introduced in Kentucky^[4], as well as the other states who are in the process of creating and or passing some form of sports betting legislation and the formation of the pro-repeal American Sports Betting Coalition, a lobby alliance which includes the American Gaming Association and the National Indian Gaming Association.^[5]

PASPA was formally challenged in the state of New Jersey. In March 2009, New Jersey State Senator Raymond Lesniak filed a lawsuit in the United States District Court for the District of New Jersey claiming, among other things, that the PASPA unconstitutionally discriminated among the states by allowing four states to offer sports betting while disallowing the other forty-six states from enjoying the privilege; however the case was dismissed as the court argued that only then-Governor Chris Christie could bring the suit, and at that time, Christie believed it would be difficult to challenge the law.^[6] A 2010 referendum showed overwhelming support by state voters to legalize sports gambling,^[7] and by 2012, the state passed a law that would allow for sports gambling at licensed locations.^[8] This law was challenged by the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and Major League Baseball in August 2012, arguing their new law violated PASPA.^[9] The state argued that they knew their law likely violated PASPA, but argued that PASPA itself violated the Tenth Amendment's protection against anti-commandeering federal laws that stripped the power of the state to repeal their own sports gambling ban.^[10] This case, heard in the United States District Court for the District of New Jersey, found for the sports leagues, dismissing the state's claims regarding PASPA.^[11] New Jersey appealed the decision. On September 17, 2013, the Third Circuit Court of Appeals, in a decision by Judge Julio M. Fuentes, found for the sports leagues, again ruling that the state law violated PASPA and enjoined the state from enacting the law.^[12] However, the Appeals Court also ruled that PASPA did not prevent New Jersey from repealing any existing laws it had.^[13]

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Based on the Appeal Court's comment, New Jersey, now with Governor Christie's blessing, passed a new law in 2014 that repealed a former state law that banned sports gambling.^[13] The four leagues and the NCAA filed suite against this new law, again arguing that it violated PASPA. The leagues and the NCAA prevailed both at District Court and at an en banc decisions from the Third Circuit by August 2016, leading the state to petition the Supreme Court of the United States to hear the case.^[14] New Jersey appealed this case to the United States Supreme Court, requesting examination of PASPA under the anti-commandeering provisions of the Tenth Amendment.^[15]

The Supreme Court accepted the case in June 2017^[16] and heard oral arguments in December 2017;^[17] during this time, Governor Christie stepped down and was replaced by Phil Murphy; the case before the court became Murphy v. National Collegiate Athletic Association. The case was combined with a separate petition NJ Thoroughbred Horsemen v. NCAA, representing commercial interests related to PASPA. The Court ruled in May 2018 in a 7-2 decision that parts of PASPA were unconstitutional as they commandeered power from the states, and in a 6-3 decision, determined that the whole of PASPA was unconstitutional.^[18][19]

Definition Of Gambling

References[edit]

Federal Law Definition Of Gambling In South Africa

1. ^Lambert, Troy (July 18, 2017). 'Supreme Gamble: The Professional and Amateur Sports Protection Act'. Huffington Post.
2. ^Rodefer, Jeffrey (March 5, 2007). 'Sports Protection Act'. gambling-law-us.com. Retrieved July 24, 2017.
3. ^Johnson, Brent (October 17, 2014). 'Christie signs law allowing sports betting in N.J.'The Star-Ledger. Retrieved July 24, 2017.
4. ^'New Kentucky Bill Would Legalize Sports Betting In Bluegrass State'. Legal Sports Report. September 20, 2017. Retrieved October 24, 2017.
5. ^'Tribal, Commercial Casino Alliance On Sports Betting Gains Momentum'. Legal Sports Report. September 25, 2017. Retrieved October 24, 2017.
6. ^Spoto, MaryAnn (September 25, 2011). 'Casino, horse racing leaders push for legalization of sports betting in N.J.'The Star-Ledger. Retrieved March 16, 2018.
7. ^Spoto, MaryAnn (November 8, 2011). 'Sports betting backed by N.J. voters'. The Star-Ledger. Retrieved March 16, 2018.
8. ^Friedman, Matt (January 17, 2012). 'Gov. Christie signs bill allowing gamblers to place bets on pro, college sports teams'. The Star-Ledger. Retrieved March 16, 2018.
9. ^Heitner, Darren (August 7, 2012). 'Constitutionality Of Sports Betting Prohibition At Issue In NCAA And Professional Leagues' Lawsuit Against New Jersey'. Forbes. Retrieved July 24, 2017.
10. ^Schamis, Axel; Van Bramer, Katherine. 'Christie v. National Collegiate Athletic Association'. Legal Information Institute. Retrieved March 18, 2018.
11. ^Drape, Joe (March 27, 2013). 'Cash-Hungry States Eye Sports Betting, to Leagues' Dismay'. The New York Times. Retrieved July 24, 2017.
12. ^'Appeals Court Upholds Constitutionality Of New Jersey Sports Betting Ban'. United States Department of Justice. September 17, 2013. Retrieved July 24, 2017.
13. ^ ^abPurdum, David; Rodenberg, Ryan (March 3, 2018). 'The odds of legalized sports betting: New Jersey vs. the leagues'. EPSN. Retrieved March 16, 2018.
14. ^Johnson, Brent; Salant, Jonathan (August 9, 2016). 'N.J. loses again in quest to bring sports betting to state'. The Star-Ledger. Retrieved July 23, 2017.
15. ^'Christie v. National Collegiate Athletic Association'. SCOTUSblog. Retrieved July 26, 2017.
16. ^Johnson, Brent; Salant, Jonathan (June 28, 2017). 'U.S. Supreme Court agrees to hear N.J. sports betting case'. The Star-Ledger. Retrieved July 22, 2017.
17. ^'The NJ Sports Betting Case Gets Its Day In SCOTUS: What We Learned'. Legal Sports Report. December 4, 2017. Retrieved December 5, 2017.
18. ^Purdum, David (May 14, 2018). 'Supreme Court strikes down sports betting law'. ESPN. Retrieved May 14, 2018.
19. ^Maese, Rick (May 14, 2018). 'Analysis | What the Supreme Court's sports gambling decision means'. The Washington Post. ISSN0190-8286. Retrieved May 14, 2018.

External links[edit]

• Opinion for Murphy v. National Collegiate Athletic Assn. (16-476) from SupremeCourt.gov
• Professional and Amateur Sports Protection Act of 1992, Chuck Humphrey, Gambling Law US

Internet Gambling Laws By State