Gambling Prohibition and Regulation

One of the concepts that a lot of people struggle with when looking at gambling law is confusing regulation with prohibition to the extent that they think that if something that may be permitted under regulation is not permitted, then it is prohibited.

To put this in simple terms, we might think that since the law does not permit gambling, it is not permitted. Under criminal law though, anything that is not made a crime is not a crime obviously, and is therefore permitted under criminal law.

Criminal law is what is being referred to when we speak of general prohibitions to certain acts, including whether gambling would be legal or not. In cases where it is not legal it is illegal by virtues of criminal statutes.

I’ve read such things on the internet such as gambling may not be legal but it isn’t illegal, which doesn’t make sense and is actually a contradiction. So this can be a little confusing to some people and it’s important that we clarify the way this all works.

Any act not specifically prohibited under criminal law is permitted. There’s nothing particularly special about gambling and we could look at a great number of other practices and compare here.

For instance the law doesn’t explicitly permit you to brush your teeth but this doesn’t in any way suggest teeth brushing would be against the law, or that teeth brushing would involve some sort of grey area under the law.

This might seem like a foolish mistake but it’s one a lot of people make, for instance in viewing certain jurisdictions such as Canada as being a grey market where the legality of online gambling is concerned, in spite of the law there not prohibiting individuals in any way from gambling online.

This confusion has even led to several online gaming sites from pulling out of Canada, so there are practical consequences of not understanding this all properly, even though it’s a very simple concept, the law either expressly prohibits it or it is legal.

What this boils down to is that for the discussion of the legality to even start, we need clear laws against it, or there are simply no laws against it and it is fully legal.

Regulation Means Allowed Under Certain Circumstances

In addition to the power of the law to prohibit something, it may allow it under certain circumstances, which often but not always involves the government exercising some degree of control over permitted gambling operations. Often these regulations will be enacted in concert with a revenue share scheme through taxation.

So for example, regulations may prescribe certain conditions, such as that operators receive a license from the regulatory body, which involves certain restraints, such as not offering gambling to minors for instance, and they also may be subject to certain taxation schemes, apart from the regular corporate tax that they would normally pay on profits.

An example of gambling regulation would be the online regulation of gambling in Nevada, New Jersey, and Delaware. There are certain conditions that exist here where operators may offer gambling to residents of these states, including that the players physically reside in one of these states.

So an operator in New Jersey cannot offer play to someone in the state of New York, even though the player may reside in New Jersey, as this is just the way that it is regulated there. In any case, this is what regulation is, permitting it under certain circumstances.

Interestingly enough, regulating something does not necessarily mean that it is prohibited, at least from a player’s perspective. So you may need a license to operate a gambling operation in New Jersey for instance, but this does not mean that players from New Jersey cannot gamble at unlicensed establishments, especially those outside the state. So we can’t assume too much here.

In order for regulation to work, the regulatory body must have the legal power to permit or not permit it, and as obvious as this might seem, there’s a fair bit of confusion that arises here as well. For example, a lot of people have been clamoring for the U.S. federal government to legalize and regulate online gambling, without properly considering whether they even have the legal power to do so, and they quite clearly do not.

Where We’re Headed With This

More and more jurisdictions around the world, especially in Europe, have been moving toward regulation, and in a lot of cases they are doing it in an environment where online gambling is already legal, so this isn’t always to overcome prohibitions and provide a legal alternative.

The regulation of online gambling is already being looked at by several more states beyond the three that have a framework already in place, and this has attracted a great deal of attention among players and observers alike.

While regulation is certainly a step in the right direction where the business and enjoyment of online gambling is concerned, people tend to put way too much weight on its importance, as we will discuss further in the coming articles.

For now though, the legal landscape isn’t anywhere near as clear as many people think, and even more importantly, the practicality of enforcing anti gambling laws where online gambling is involved renders the laws virtually meaningless.

Enforcing gambling laws in the online sphere would be possible in theory but not without turning the jurisdiction into a police state and also committing way more resources than would be practically feasible.

Perception though often becomes reality, and this is essentially what legislators and enforcement officials are counting on, and the perception that the law here matters is often enough to scare both players and poker sites away, as we’ve seen.

So instead of just saying none of this really matters, it does matter, but what matters most is to have a proper understanding of the dynamics at play here, in order to make informed choices.