Bill Gantz, partner of Dentons US LLP, considers the proliferation of legal intrastate non-sport internet gambling and related financial transactions under UIGEA.

Bill Gantz

AS the US stubbornly accepts its fate to become the world’s largest regulated online gambling market, there remains much hypothesising about what the federal government of the US may do “about” internet gambling. 

Yet state-approved internet non-sport gambling by persons within that state has never actually violated any federal law, including the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. §5361, et seq.   

Accordingly, no new federal gambling legislation is needed for intrastate non-sport gambling - or financial transactions relating to the same - to be made “legal” in the US. Importantly, the stage is also set for a legal path toward interstate compacts and international game play on US-licensed websites. While the sceptics and the cautious sit it out, waiting for the federal government to yank the carpet out from underneath the industry once again, UIGEA-style, the legal case for intrastate online gambling in the US and related financial transactions is actually already firmly buoyed by UIGEA.

UIGEA accepts state laws permitting online gambling

Despite its aggressive and meaningful-sounding name, UIGEA simply adopts state law, whether prohibiting or permitting gambling:

Rule of construction - No provision of this subchapter shall be construed as altering, limiting, or extending any federal or state law or Tribal-State compact prohibiting, permitting or regulating gambling within the United States - 31 U.S.C. §5361(b)(italics added).

The only activity proscribed by UIGEA is found in §5363:

No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful internet gambling –

(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);

Read the full article in the current issue of InterGaming Law.