The U.S. House and Senate recently voted to pass a bill that, if passed into law, will regulate online gambling in the same way as traditional offline casinos. Proponents of the bill hail it as a way to protect against organized crime run amok and to end the unchecked power of online gambling websites. Opponents decry the bill as yet another attempt by Washington to impose corporate control over American life. The only problem is that even if the new UIGEA is successfully enforced, will anyone really be forced to leave the country anyhow?
The UIGEA covers not just web casinos but also all U.S. residents who conduct virtual poker, craps or roulette online. According to the official definition contained in the IRS Code, “gambling” means playing an instrument for wagering, predicting results of a race or playing a game for money or other things of value in exchange for a wage, fee or other form of compensation. It is a crime to operate a place of business that accepts deposits for such wagers, except for a licensed tax collector. That leaves a wide open field of interpreting the UIGEA.
One issue that is frequently overlooked is whether the activity of gambling actually constitutes gambling. The definition includes any activity in which a person pays money or other form of consideration or hopes to win, to move forward in a course of action that appears likely to result in loss or damage to some sort of economic institution, person, property or rights. Whether or not it can be determined that someone has actually been “playing the game of chance” is often open to interpretation. In the case of slots machines in casinos, there is no argument that the revenue generated from these machines is a form of income, though the same cannot be said for live casino slot machines.
Slots are mechanical devices that spin the reels within the machine. Every spin is independent of the others and adds nothing to the outcome. Paying real money for spins on slots can quickly add up to a sizeable profit for a casino. While it is true that the casino may consider all monies paid for spins on its machines to be gambling, it must also be considered that many of those same individuals would not have those funds available if they were not allowed to spend them on free spins on their chosen machines. Therefore, while the act of paying for spins on slots can be considered a form of gambling, it would be considered very differently if the funds were not available for use on free spins.
The UIGEA closely follows the overall spirit of UIGEA regarding gambling and the enforcement of its laws. As originally written, the UIGEA contained a ban on the creation and distribution of software that enabled people to place bets on any form of gambling, with the exception of video games. While the United States Supreme Court has attempted to have the UIGEA interpreted to allow casinos to open by narrowing the meaning of the word “gambling” to include video games. In a landmark case in 2021, the United States Supreme Court ruled that the UIGEA violates the constitutional rights of individuals to access casinos. Since that time, however, other states have passed similar gambling laws without the threat of losing the Supremacy of the UIGEA at the hands of state governments.
There are, however, some important differences between what constitutes gambling and what is a gambling-related activity. Video games are clearly a form of gambling because it can be calculated to a mathematical equation in which one person will always come out ahead, regardless of how many times someone else plays the game. On the other hand, movies and television shows are clearly forms of gambling as they can be purchased legally and enjoyed by anyone. However, the creation and distribution of these products are controlled by the laws that cover all aspects of American society. This is why, when it comes to video games, it is important for the United States government to monitor and regulate the video games industry in order to ensure that consumers are able to obtain legitimate video games and do so in an honest manner.
The Wire Act covers the sports gambling industry more than any other part of the industry in any way. The Wire Act was written by Congress in an attempt to regulate online gambling and as well as other forms of virtual gambling. In short, the Wire Act attempts to regulate and limit the amount of money that can be withdrawn from a person’s account by a sportsbook. This law allows for state licensed gambling establishments and also state licensed sportsbooks to be engaged in the business of accepting bets or conducting video poker games.
It should be noted that although the United States Justice Department has not brought legal action against an online gambling establishment, the state of New York is the only jurisdiction that has brought legal action against a sportsbook. The justice department’s lawsuit was brought against the New York State Commission on Sports Book Activities and their operations in regards to sports betting. The complaint filed by the state court demanded that the commission’s regulatory programs be changed in an effort to prevent any illegal activity with sports books and also demanded that all commission employees be required to be fingerprinted and certified.