In the United States, gambling is regulated by both the Federal government and by individual state governments. Although state laws regarding gambling vary from state to state, there are federal laws that prohibit certain forms of gambling in every state. Importantly, when the Federal government prohibits certain forms of gambling, the states must abide by the federal laws, as the regulations of the federal government will trump the state laws. However, many states have some forms of legal gambling.
Although the exact legal definition for gambling may differ by state, typically a person engages in gambling if they risk something of value upon the outcome of a game of chance or an understanding that they will receive something of value in the event of a specified outcome. It is important to note that gambling excludes business transactions based on the law of contracts, such as the purchase of stocks, securities, the purchase of life insurance, or the purchase of health or accident insurance.
Legally gambling will be defined by a state’s statutes, and what is considered to be legal gambling will be specifically referenced. For example, in Nevada, many forms of gambling are considered legal through specific mention in the state’s statutes, whereas other states may consider the same form of gambling illegal. One of the most common forms of legal gambling in the United States is state lottery systems.
Outside of specifically referencing what activity is considered to be legal gambling, states will also typically put an age restriction on persons allowed to participate in the act of gambling. In most states it is illegal for minors to gamble or play games of chance, including betting on professional or college sports, participating in poker games, and betting on school sports.
Most states require that an individual be at least over the age of majority to participate in the act of gambling. Some states require that an individual be over the age of 21 to gamble, while other states only require that an individual be over the age of 18.
What Is Illegal Gambling?
As mentioned above, there are both Federal and state laws that govern what is considered illegal gambling. Federal law defines illegal gambling activity as any gambling that:
- Is conducted in violation of the law of a State or a political subdivision of the state in which it is conducted;
- Involves fiver or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
- Has been or remained in continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 or more in any single day.
Federal law reaches into nearly every form of gambling, and has influence on nearly every aspect of gambling law. In addition, Federal laws have been crafted to cover forms of gambling law that states are not able to fully regulate. Common areas of gambling that are regulated by Federal law include:
- The transportation and possession of gambling devices or gambling paraphernalia across state lines;
- Gambling involving the betting on sports in states other than the state in which the sport is actually occurring;
- How and where certain bets can be made; and/or
- Internet gambling, such as online casinos or fantasy sports.
Once again, states are permitted to create their own regulations and prohibitions on which forms of gambling are considered to be legal gambling in their state, so long as the laws abide by Federal regulations. This means that, as long as the state laws do not conflict with Federal gambling laws, they can create their own set of laws governing gambling.
How Have Gambling Laws Evolved Over Time?
Federal laws ultimately control and establish the framework for what is considered to be illegal gambling for the states. As such, legislation passed by Congress over the years has allowed certain aspects of gambling to become more regulated today than they ever were in the past.
The following is a list of pertinent Federal Acts enacted by Congress that are related to gambling:
- Wire Act of 1961: This Act deals with the regulation of people using wire communications, such as phones, to place bets in interstate or foreign commerce;
- Travel Act of 1961:This Act deals with people involved in interstate travel for the purpose of committing illegal activities, such as the illegal transportation of gambling devices;
- Interstate Transportation of Gambling Paraphernalia Act of 1961: This Act makes it illegal to transport certain items used for illegal gambling, such as sports books or computers;
- Illegal Gambling Business Act of 1970: This Act imposes severe criminal penalties for large scale illegal gambling organizations;
- Racketeer Influenced and Corrupt Organizations Act of 1970: This Act imposes severe criminal fines and prison sentences for people who participate in racketeering;
- Professional and Amateur Sports Protection Act of 1992: This Act makes it illegal to place various kinds of sports bets;
- Interstate Wagering Amendment of 1994: This Act regulates the state laws concerning lotteries and prevents out of state people from participating in inter state run lotteries; and
- The Unlawful Internet Gambling Enforcement Act of 2006: This act prohibits internet gambling companies from knowingly accepting bets or wagers that would be illegal under any federal or state law. It is important to note that fantasy sports betting has been “carved out” of this Act, provided that the sport betting focuses on skill rather than that of chance. Additionally, the pay out cannot be based on a single real world performance.
What Are Some Factors States Consider When Deciding Whether Gambling Is Legal?
In deciding whether or not to make certain forms of gambling legal or illegal, states will consider a variety of factors, including but not limited to:
- Whether or not the game is one of skill or chance. Games of skill are generally given more leniency than games of chance;
- Whether or not all gamblers are on equal footing. If there are no odds that favor the “house” and no “house” income, the gambling act is more likely to be legal;
- How high the stakes are in the game. Games that only cost pennies to play are going to be more likely to be legal than games that have higher amounts of money at stake; and/or
- Where the act of gambling is taking place. Gambling in one’s own private home will be more likely to be legal than gambling in a public place.
What Are the Penalties for Violating Gambling Laws?
Depending on specifics and circumstances of the activity, the penalties for violating gambling laws can be severe. If you violate Federal or state gambling laws, you may face one of the following penalties:
- Severe criminal fines;
- Misdemeanor charges;
- Forfeiture of all winnings related to the gambling venture; and
- Conviction of a felony, resulting in other additional penalties such as:
- Loss of professional licensure;
- Loss of the right to possess firearms; and/or
- Loss of the right to vote.
Do I Need an Attorney for Issues Involving Gambling?
As can be seen, the laws surrounding gamnbling vary drastically from state to state. Further, the act of gamblign in many cases is also regulated by Federal law. Thus, if you have been charged with a crime related to the act of gambling, it may be in your best interest to immediately consult with an experienced entertainment attorney.
An experienced criminal defense attorney will be aware of both the Federal and state laws regarding gambling. Additionally, an attorney will also be able to ensure your legal rights are protected throughout the entire criminal process. Finally, an attorney will be able to determine whether or not any legal defense is available to you, and represent you in court, as necessary.