Online Casinos

Are online casinos legal? This is a simple question with a complex answer. Legal jurisdiction is divided between state and federal courts, and this patchwork of overlapping laws complicates interpretation. Absolutely clear is the fact that the majority of participants in the online gaming world are from the United States.

Significance of the Wire Act

In 1961, Congress enacted “The Federal Wire Act,” criminalizing interstate telephone wagering. With the advent of the Internet and the initial lack of specific legislation designed for it, courts frequently extended existing wire-act legislation to cover the cyber world. In theory, this should have been a logical judicial step in this situation. However, the government generally deferred to the states to police gambling in their jurisdictions and this law was never brought to bear against online gaming businesses nor individual bettors.

Current Federal Legislation

Online Casinos LawsAt the crux of the 2006 “Unlawful Internet Gambling Enforcement Act” was the question: are online casinos legal? The intent of the legislation was to narrowly define and place certain restrictions on areas of interest in online gaming for the federal government. Effectively, it amended the 1961 legislation and lifted the shadow of criminality from the individual bettor and targeted the businesses and financial institutions involved in the enterprise. As a result, engaging in the business of online betting or wagering in the United States is a criminal offense.

Furthermore, the acceptance of funds from bettors by financial institutions would place the bank or credit card company in danger of criminal and civil actions for processing online gambling funds. Financial institutions were also required to develop internal procedures to block the transference of funds related to online gambling. A provision of the act includes a clause that empowers the courts to order United States-based internet service providers to block access to an online gaming website.

Exceptions granted by this law include:

  • Online wagers placed and received within a single state where an enabling act has been passed in that state.
  • Online wagers placed and received on Indian tribal lands and operating under enabling laws passed by tribal councils and recognized by the National Indian Gaming Commission.
  • Online horseracing, if wagers are legal in the locations where they are placed and received.

State Laws About Online Casinos

Nine states have definitively answered the question: are online casinos legal? Illinois, Louisiana, Indiana, Montana, Nevada, Wisconsin, South Dakota, Washington, and Oregon have enacted laws making it a criminal offense for an individual to wager at an online casino. Even if a state hasn’t expressly criminalized online casino wagering, a player may still be subject to prosecution in that state under other gambling laws as applied in certain situations.


From a bettor’s standpoint, the question: are online casinos legal? would be answered in the affirmative…unless you live in a state proscribing such activity. However, in regard to a business enterprise, the answer is negative. The United States-based websites, banks and credit card companies may not be involved in online casinos in any fashion.