The changing face of gambling laws in the US

One of the great ironies of the “United” States is that across the country’s 50 states, it is far from united on many issues. This is particularly evident when one starts to examine the law. What may be legal in Maryland could be a felony in New England. This state of affairs is an inevitable consequence of a constitution in which states are allowed to set their own laws, separate from the federal ones that govern the whole country.

The legality of gambling is a particular case in point. It would be hard to find two different states in which the laws governing gambling are the same. The only exception to this would be Utah and Hawaii, where all gambling is banned absolutely. Across the other forty-eight states, there are varying levels of legality.

We would need to write a legal treatise to explain the specific laws of each state. So, for the purposes of this article, we will look at just three: Nevada, Mississippi, and Tennessee. These have been selected as representatives of a very liberal state, a moderate one, and one in which severe restrictions apply.

Nevada, aka Sin City

Nevada first passed laws permitting gambling in 1931, and until the establishment of the Gaming Control Board in 1955, it was overseen at a local and county level. Four years later, the Gaming Control Act also established the Nevada Gaming Commission, which continues to control all gambling activities today.

One can get a picture of what a complex picture gaming law presents in the US by the fact that a state which generates a vast gaming tax revenue each year still has two illegal activities – lotteries and racetrack betting.

Where the state did lead the way was in 2011 when the Nevada Gaming Commission first introduced legislation to regulate measures for interactive or online gambling. This was welcome news for players of poker games.

Unlike other forms of gambling, it could be argued poker has an element of skill involved, so questions are raised as to whether poker should fall under the same gaming laws and regulations.

Mississippi Steamers

For many, Mississippi will always carry the image of paddle steamers heading up and down the Mississippi river with onboard casinos. This isn’t without some basis, as many gambling games brought over from Europe in the 18th and 19th centuries were first played in New Orleans.

Today, Mississippi is unusual in being a state in the Deep South that still has a reasonably relaxed approach to gambling. There are a number of casinos in the state where sports and pari-mutuel betting, alongside licensed lotteries, are also permitted.

However, the Mississippi Gaming Commission forbids all forms of gambling, including poker, outside of licensed casinos, and this is enshrined in Miss. Code Ann.  § 97-33-1.

Tennessee and the Bible Belt

In Mississippi’s neighboring state, however, it is a very different story. Tennessee, like many of its southern neighboring states, is in what is sometimes called the Bible Belt and takes a hard line on gambling, with only sports betting and certain lotteries being permitted.

Anyone caught gambling can be charged with a relatively minor Class C Misdemeanor with a fine of up to $50.

Organizing games like poker to make money is a Class B offense with a potential fine of up to $250.

But the law takes a far sterner view on anyone financing, owning, or running a gambling business. This Class E felony can lead to a fine of up to £10,000 and a six-year prison term.

The problems of legislating online gambling

While states like the ones described above have little trouble enforcing their regulations on land-based gambling establishments, the arrival of online gambling in the early nineties presented a particular problem.

With operators who could be based almost anywhere, being able to offer their games to anyone with an internet connection meant urgent measures were needed.

Attention was focused on the Wire Act, 18 U.S.C. § 1084 (2000), which forbade anyone from using a “wire communication facility” to transmit information related to wagering on “any sporting event or contest.” A House of Representatives Committee asserted that the law only related to sports betting, so another law was passed in 2006, the Unlawful Internet Gambling Enforcement Act. While this made it illegal for online operators to accept payment for online wagers and for financial institutions to process the payments, it did not criminalize online gambling.

Some states, such as Washington, added their own legislation to make knowingly transmitting or receiving gambling information over the Internet a felony, while others chose to keep a low profile on the subject. However, in the 15 years since the original legislation was passed, an increasing number are starting to gradually allow online gambling while still ensuring that there is a regulatory framework in place to ensure that it is adequately policed.

The sporting betting breakthrough

The legal landscape for all forms of gambling in the US was undoubtedly re-shaped back in May 2018 when the US Supreme Court decided to legalize sports betting. Since 1992 this activity had been barred under the Professional and Amateur Sports Protection Act, and there was significant pressure from bodies, including the NFL, NBA, and MLB, that it should remain in place.

But a long and concerted campaign by states, led by New Jersey, saw the law overturned. Since then, an increasing number of states have made sports betting legal. To date, 21 states have introduced sports betting, with three, Wyoming, Arizona, and Washington, soon to bring it into law.

Looking ahead

So, it seems like there will be a considerable loosening of the laws relating to all forms of gambling in the near future. That said, southern states are less likely to make these changes than other states, and it is highly doubtful that there will be any change in Utah and Hawaii.

But, in other states, it might just be that the land-based and online operators are on the cusp of a new golden age of gambling.