Until fairly recently, the prohibition and regulation of gambling was a pretty simple matter, simple at least compared to what we have today with the coming of online gambling.
Before we can go too deeply into today’s reality of having online gambling widely available, and the way that the law pertains to it, we need to have a look at how these new changes have reshaped the legal landscape where the creation and enforcement of gambling laws are concerned.
Historically, gambling was always conducted at a specific physical location, in a specific jurisdiction. While it has always been challenging to enforce gambling laws, and continues to be, at least you were only dealing with gambling on one plane so to speak, the physical plane we’ll call it.
This actually started to change well prior to online gambling surfacing, when telecommunications became widely available. If bets can be transmitted, by telephone even, then the possibility exists that the bets may be made and placed in separate jurisdictions, which was a big part of the impetus of the Federal Wire Act of 1961, and the fact this was passed in 1961 tells you this is far from a new problem.
We’ll talk about this law in much more detail later, but the problem that arose here is that individual states do not have legal power beyond their own borders, and if there are laws against offering gambling in their state, and the gambling is being offered in another state, then they don’t have the power to go after the operators.
They can go after the players, but enforcing gambling against players who are not gathering in a common location to bet is virtually impossible. In theory, you could wire tap every phone and hire someone to listen to all the calls to try to detect bets being made, but this is outrageously impractical.
If the gambling all occurs in one location though, then at least there is often information that can be gathered about these gambling events and they can be busted by the cops. This happens from time to time around the country even today.
When the location is moved outside the jurisdiction though, then all bets are off, and the jurisdiction where the bets are being placed from, where the betting or gambling is actually taking place, is powerless to stop it, due to an inability to obtain enough information to detect it.
Online Gambling Greatly Expands This Challenge
With online gambling, we’re not only talking about the bets being placed outside the state, but outside the country as well. Now one may think that technology would make it fairly easy to detect people placing bets online, but this really isn’t the case.
In some countries, with privacy laws far less stringent than what we see in the United States, they have attempted to monitor people’s internet activity to look to catch them gambling online, but this has failed. This is a lot harder than one may think, and just because someone visits an internet site, doesn’t mean they have gambled with real money at it.
To make things much more challenging, people in these countries often connect to the gambling sites through virtual private networks, located in other countries, and this not only gets around a country’s banning their internet providers from offering people access to gambling sites, it takes the whole gambling experience behind a curtain that the government cannot access, even with all the spying they wish to do.
So online gambling has the means to take the whole gambling experience well out of the reach of enforcement agencies, and even completely off the grid should one choose. Geolocation to try to get around proxy servers won’t help here by the way, as this requires the providers to co-operate, and they want the business of your players and aren’t subject to your wishes so this isn’t feasible.
Some Other Differences Between Land and Online Gambling
Aside from these obvious practical impediments to enforcement, which is the biggest issue here by far in spite of few people realizing it, there are some other differences, ones that are more commonly cited.
Some of the laws in various states are focused upon it being illegal to offer gambling in their state, and at one time this was sufficient to limit most of not all of it, due to all or almost all of the gambling being done at physical locations within the state.
So the thinking was, get rid of the operators, and you get rid of the gambling, but this of course isn’t the case anymore. So there may not even be any laws against gambling per se, and the laws may not have been updated since.
There’s also the matter of where the gambling takes place when it occurs online, and without any specific direction in the law, saying for example that if a bet is placed on a device by someone in the state than the gambling occurs in the state, a good argument can be made that the gambling exists on the server where the bet was placed.
So in other words if you place a bet with a gambling site and their servers are located in another country, the gambling occurred in that country, just like it would if you visited that country and gambled in one of their casinos there.
There’s no law saying you can’t go to a casino in Canada for instance, and it may not be any different if the server that you placed the bet is located in Canada either, and most bets by Americans go through Canadian servers.
So you can be placing bets in a certain state but whether or not you are gambling in that state may be at the very least disputable.
I do want to point out though that just because a state doesn’t explicitly prohibit online gambling, doesn’t mean that online gambling is permitted, as this is going to depend on the laws of the state, and depending on how they read, it may or may not.
Online gambling has certainly changed the gambling landscape forever though, not just from a convenience perspective, but from a legal one as well.