The legality of online casino gambling
Are internet live dealer casinos legal in the
The below discussion still serves as a relevant
background to the current US online gaming law. While there have been no recent
legislative changes at a federal level, developments at the state level have
been numerous and significant through 2012 and 2013.
The catalyst for change
came in December 2011 when the
US Department of Justice issued a memorandum opining a revised stance on their
interpretation of the Wire Wager Act. Until this point the DOJ position had
been that the Wire Wager Act made all forms of online gambling illegal. The
revised position was (and still is) that this Act now only applies to online sports
betting and not casino, poker or other games of chance.
In light of
this changed stance, a number of US state legislatures, most notably those in
Delaware, New Jersey and Nevada, have moved quickly to pass intra-state online
gambling laws. In February 2013 gambling bills were signed into law in both
Nevada (poker only) and New Jersey that would allow residents of those states to
play locally licensed online casino games.
The New Jersey and Delaware laws
allow bricks and mortar casinos in those states to offer any of the games they
provide on their casino floors in online form. New Jersey residents may soon be
able to play live dealer games streamed from an Atlantic City casino from their
The current legal position in the US is confusing to say
the least. Prior to 2006, old Federal and State laws like the Wire Wager
Act were relied on by authorities as the principle basis supporting the
contention that online gambling is illegal and efforts to prosecute operators
offering their services to US residents.
Still today these laws are cited, as was the case in Minnesota in April 2009,
when their Department of Public Safety relied on the Wire Wager Act as legal
authority for a letter sent to 11 national and regional telephone and ISP
providers demanding they block Minnesotan's access to 200 online gambling
websites. The demand has since been challenged as an incorrect
interpretation of the Wire Wager Act and as having no legal basis in a lawsuit
brought by iMEGA.
Given the Wire Wager Act was drafted in 1961, its inadequacy in applying
effectively to services offered
over a medium that was not contemplated at the time of its drafting can be
In 2006, the Bush Administration passed the Unlawful Internet Gambling
Enforcement Act (UIGEA). The intent of this legislation was to make it
impossible for offshore online gambling operators to offer their product to US
residents by rendering it illegal for US financial institutions from
facilitating payments between those operators and US based players. Its
practical operation has been problematic for a number of reasons.
agencies charged with the enforcement of UIGEA are told to make sure that
financial institutions block all 'unlawful Internet gambling', nowhere in the
legislation is this term defined. So in what's turned out to be a slightly
farcical situation, those agencies have directed the relevant financial
institutions to make the
determination as to what is 'unlawful Internet gambling'. Of course they
are even less qualified to make this determination.
Regardless of US financial institution's ability to practically comply with
the burden of blocking 'unlawful Internet gambling' transactions, another
reality lawmakers are coming to understand is that there are a multitude of
other deposit options offered by offshore financial institutions beyond the
jurisdiction of UIGEA's operation. And while the passing of UIGEA led to
many online gambling operators (typically the larger publically listed
corporations) pulling out of the American market for the time being, it has done
little to dissuade many operators from continuing to serve US residents.
UIGEA's days may also me numbered with repealing legislation drafted and
intended for presentation to Congress at the time of writing. Hopefully
any new legislation clears up current uncertainties.
player's perspective it should be noted that UIGEA is aimed at financial
institutions and online gambling operators and not players.
Professor I. Nelson Rose, Senior Professor at the Whittier Law School and
well regard online gambling legal authority
states that “no United States federal statute or regulation explicitly prohibits
online gambling, either domestically or abroad,” and that the UIGEA by its own terms it does not apply to
Specific to live dealer casinos
included in the definition of 'unlawful Internet gambling', live casino
games are clearly one of the types of gambling activities in contemplation by
lawmakers when UIGEA was drafted. Most of the casinos that offer this
format are among the industry's larger (often owned by publicly traded
corporations) operators who have chosen to withdraw from the US market until the
legal position is clearer, and do not currently accept US players.
summary of milestones relevant to this discussion is listed at
Wikipedia's online gambling page.
Are internet live dealer casinos legal in the United Kingdom?
The UK legislature has taken a very different path to the US and passed laws
designed to regulate and license online gambling activity. The
Gambling Act 2005 ('the Act'), the operative provisions of which came into
effect in 2007 to apply to all forms of gambling in the UK with the exception of
spread betting and the National Lottery, includes specific clauses aimed at
The Act defines remote
gambling as any form of gambling in
which players participate by the use of remote communication, which in turn is
defined to include the internet, telephone, television, radio, or any other kind of electronic or other
technology for facilitating communication.
Provisions in the Act relating to remote
gambling provide as follows:
A new authority, the
UK Gambling Commission, was formed to regulate and enforce the Act's operation including all provisions
related to remote gambling. All remote gambling licensing applications are
assessed by the Gambling Commission.
Legality for players
Nothing in The Act makes it illegal
or seeks to prevent United Kingdom residents accessing any remote gambling
Operator license requirements
Any remote service provider locating any form of remote gambling equipment
(servers etc) in the UK must obtain a remote gambling license from the UK
Gambling Commission in order to be able to provide remote gambling services.
Offshore operator stipulations
As long as offshore operators are complying with the licensing requirements
in the jurisdiction in which their remote gambling service is located it is not
illegal for them to offer their services to UK residents.
Any remote gambling service provider licensed in either the UK, Gibraltar,
an EEA member (most European countries) or any other jurisdiction designation by
the UK Gambling Commission as having 'White Listing Status' may advertise
through the UK via traditional mainstream media.
As a result of the UK's regulatory approach
to online gambling, it has become the epicenter for the industry's largest
All casinos offering live dealer games
accept players from the UK, and many are licensed and regulated in either the UK
Are internet live dealer casinos legal in other
Both EU Member States ("EU members") and EEA Member States ("EEA members")
are bound by the laws contained in the European Communities Treaty ("the
Treaty"). The Treaty's operative provisions are enforced by the EU's
executive arm, the European Commission ("the Commission") and adjudicated by the
European Court of Justice ("ECJ").
EU members include:
EEA members include all EU members plus Norway, Iceland, Liechtenstein,
of key provisions of the Treaty, relevant to the issue of online gambling, is the
set out in Article 49 and relates to the freedom of EEA member
service providers to offer their services to residents of all EEA member
residents. It is one of the often cited "Four Freedoms Principles" and
"Within the framework of the provisions set out below, restrictions on
freedom to provide services within the Community shall be prohibited..."
provision of the Treaty was included as a safeguard against any protectionist
measures being introduced by EEA members, and to encourage free cross-border
trade of services. In the instance where an EEA member enacts a law
prohibiting resident access to a service provided by a foreign service provider
(ie one based in another EEA member country) and that same service is able to be
provided by local service providers, a clear breach of the Treaty, and
specifically Article 49 has occurred.
This situation should be contrasted with
the case where an EEA member has passed laws prohibiting resident access to a
service whether provided by local or foreign service providers. Here there
is no protectionist element to the law and consequently no breach of the Treaty.
Nothing in the Treaty prevents an EEA member from banning a particular service
on whatever grounds, so long as the ban doesn't prejudice service providers in
other EEA member states in favor of local operators.
So what's the relevance
of all this to online gambling and more specifically live dealer casino
The Commission and the ECJ have categorically stipulated that the
freedom-to-provide-services-provisions of the Treaty apply to online gambling
services as they do to all others. As a consequence, where an EEA member
has legally sanctioned local online gambling services it cannot enact laws
prohibiting similar online gambling services being provided to its residents
from operators based in other EEA member countries.
Where an EEA member law is
in breach of the Treaty it is effectively illegal, and therefore easily
challenged by effected parties. As well as being operationally
ineffective, the law may become the subject of an infringement proceeding issued
by the Commission. At the time of writing, no less than 10 EEA members
were the subject of infringement proceedings related to online gambling laws
that breached the Treaty.
A number of EEA members are in the process of changing laws related to online
gambling so that they are consistent with the Treaty.
While the goal posts are constantly moving with new laws seemingly being
proposed monthly across Europe, as at the end of 2008, regulations with respect
to online gambling were summarized conveniently by a
European Parliament committee study as follows:
Are internet live dealer casinos legal in
Australia's laws with respect to online gambling are set out in the
Interactive Gambling Act 2001 ("the Act") which came into effect June 2001,
making Australia one of the first countries to pass legislation drafted
specifically to address the issue of online gambling.
The Act takes a
prohibitive approach to online gambling and provides that it is illegal for an
'interactive gambling service provider ' (ie online casino, online live dealer
casino etc) to provide its services to Australian residents in the absence of an
interactive gambling license.
Holders of an interactive gambling license may offer their services to
Australian residents and the residents of any other country that doesn't
prohibit online gambling. Restrictions on the nature of the interactive gambling
services to be provided to Australian residents apply, like for example the
ability to offer in-play bets.
While the intent of the Act was to limit
Australian resident access to online gambling services, studies have since found
that Australians are gambling online at offshore based websites in increasing
numbers and limitations placed on locally licensed operator's ability to offer
competing services is only hampering their competitiveness.
Like UIGEA, the
Act targets operators of interactive gambling services and not players.
From a practical standpoint this means Australian residents are not breaking any
laws gambling online at live dealer casinos, however they may find some casinos
honor the provisions of Act despite being outside its jurisdictional operation,
and refuse to accept Australian customers.
Are internet live dealer casinos legal in
At the time of writing, no Asian country had passed legislation specifically
addressing the legality of online gambling. As a general rule however,
authorities in most Asian jurisdictions frown upon internet gambling activity
and view it as illegal by virtue of general prohibitions on gambling.
In Malaysia for example the Betting Act 1953,
which renders the operation of a 'common betting house' and the act of
gambling in a 'common betting house' as both illegal, is the cited authority for
the government position that online gambling should also be illegal. As
the legislation has not been amended to include internet websites within the
definition of what constitutes a common betting house, or any of the myriad of
other issues specific to online gambling, its effective application in this area
is difficult to imagine.
Similar situation exists in Singapore, Taiwan, South
Korea. Further complicating the situation is the fact that many of these
jurisdictions can no longer claim to impose general bans on casino gambling,
with all countries now either close to opening new casino resorts, or
legislating to allow for the development of new casinos.
A number of Asian region governments have decided that they
want to help stimulate tourism and economic activity generally (and earn some
tax revenue at the same time) by building casino industries to compete with
Macau. Singapore is soon to open two massive casino complexes while Taiwan
just recently gave the go ahead to casino development on its outlying islands.
In Japan, there is now talk that the government is speaking
to online gambling operators with a view to putting a licensing and regulatory
regime in place as a means to earn some extra tax revenue.
The gambling landscape in Asia is undergoing some significant
changes presently. For a discussion of internet regulations by country,
visit our regional analysis.
General guiding principles for all players
regarding the legality of playing live dealer casinos
The legality of online gambling, from a players perspective is a complicated
and confusing issue even in jurisdictions where lawmakers have attempted to
enact online gambling specific legislation. Even the so called experts
charged with application of those laws are often confused as to the law's
correct interpretation so what chance does the player have?
There are few
jurisdictions in the world where unambiguous, definitive legal positions exist
in this area.
In most instances where online gambling prohibitions do exist,
they are targeted at operators or payment facilitators and not players, but this
is probably of little comfort to players in jurisdictions where this general
principle does not hold true.
A useful guiding principle that will provide a
level of comfort that you are not doing anything wrong is to play at a live
dealer casino that is part of a large (publicly listed) organization that will
have the legal resources to make the determination whether yours is a
jurisdiction that they can or cannot operate in.
If, for example, a player from Australia or
the United States tried to sign up at Victor
Chandler they would be advised that the casino is not legally permitted to
accept their custom.
Disclaimer: Livedealer.og is not a legal authority and
has compiled the above discussion for information purposes only. It is not
intended to be nor should it be interpreted as legal advice.