Federal Betting Laws in the US
The United States has a complex framework of federal laws regulating gambling, covering various popular forms of gambling such as sports betting, online gambling (on casino games, poker, bingo, slots etc), and horse-racing.
These laws dictate the boundaries within which states can legislate gambling and cover protections, enforcement, and gambling integrity measures.
Professional and Amateur Sports Protection Act of 1992 (PASPA)
- Enacted: October 28, 1992
- Status: Repealed in 2018 by the Supreme Court decision in Murphy v. National Collegiate Athletic Association
PASPA was a federal law that effectively banned sports betting nationwide, except in states that already had established sports betting frameworks (Nevada, Oregon, Delaware, and Montana). The law prevented other states from legalizing sports betting.
Implications and Ramifications:
PASPA’s intent was to preserve the integrity of professional and amateur sports by restricting state-sanctioned sports betting. However, it limited states’ rights to regulate gambling within their borders, which led to opposition.
In May 2018, the Supreme Court declared in a 7–2 decision that parts of PASPA were unconstitutional, and and in a 6–3 decision, determined that the whole of PASPA was unconstitutional – thus paving the way for individual states to legalize sports betting at their discretion.
Although the Supreme Court’s opinion invalidated PASPA, the decision itself did not change the gambling laws of any State.
Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA)
- Enacted: October 13, 2006
- Status: Still in effect
UIGEA prohibits businesses from knowingly accepting payments related to illegal online gambling. The law does not define illegal gambling itself but focuses on restricting financial transactions tied to online gambling operations deemed unlawful under existing state or federal laws.
Implications and Ramifications:
UIGEA’s primary effect was on financial institutions, making it illegal to process payments related to online gambling activities. This law contributed to the shutdown of various online poker platforms in the U.S., such as during the infamous “Black Friday” event in 2011 when several major online poker sites were indicted and domains seized including domains owned by PokerStars, Full Tilt Poker, and Absolute Poker.
Interstate Wire Act of 1961
- Enacted: September 13, 1961
- Status: Still in effect (with interpretations and updates)
The Wire Act makes it illegal to use wire communications (which now includes the internet) to transmit bets or gambling-related information across state lines.
Implications and Ramifications:
Originally intended to target organized crime’s involvement in sports betting, the Wire Act’s scope has been debated in modern contexts, particularly regarding online gambling. In 2011, the Department of Justice (DOJ) issued an opinion stating that the Wire Act only applies to sports betting, but this has been contested in subsequent legal discussions and DOJ memos.
Interstate Horseracing Act of 1978
- Enacted: October 25, 1978
- Status: Still in effect
This law permits interstate wagering on horseracing, allowing states to offer pari-mutuel betting on races across state lines, provided both states allow it and the race takes place in a state where such betting is legal.
Implications and Ramifications:
The Interstate Horseracing Act enabled widespread betting on horseraces, bolstering the horseracing industry in the U.S. It also laid the foundation for legal online betting on horseracing, as long as the transactions comply with state laws.
Horseracing Integrity and Safety Act of 2020
- Enacted: December 27, 2020
- Status: Still in effect
The Horseracing Integrity and Safety Act (HISA) aims to standardize regulations across the horseracing industry, with a focus on improving the welfare of horses. It created the Horseracing Integrity and Safety Authority to oversee drug use, safety protocols, and enforcement of national standards.
Implications and Ramifications:
HISA centralized the governance of horseracing integrity and safety measures, bringing uniformity to the rules governing the sport. This is seen as a critical move to protect animal welfare and enhance the sport’s public image after high-profile cases of horse fatalities.
Indian Gaming Regulatory Act of 1988 (IGRA)
- Enacted: October 17, 1988
- Status: Still in effect
The Indian Gaming Regulatory Act (IGRA) establishes the framework for the regulation of gaming on Native American lands. It sets out three categories of gaming (Class I, II, and III) and governs the relationship between the tribes, federal government, and states.
Implications and Ramifications:
IGRA empowered Native American tribes to operate gaming facilities, helping to promote tribal economic development. Class III gaming, which includes casino-style games, requires a tribal-state compact, enabling significant expansion of gaming in states like California and Florida.
Illegal Gambling Business Act of 1970
- Enacted: October 15, 1970
- Status: Still in effect
This law was part of the Organized Crime Control Act and targets individuals running illegal gambling businesses, defined as any gambling activity violating state law, involving five or more people, and remaining operational for 30 or more days or generating $2,000 in any single day.
Implications and Ramifications:
This Act was designed to combat organized crime by making it a federal offense to operate large-scale illegal gambling operations. The law strengthens federal enforcement against illegal gambling rings tied to organized crime.
SAFE Bet Act (Pending)
In September 2024 U.S. Lawmakers Rep. Paul Tonko and Sen. Richard Blumenthal announced the introduction of a bill that will look to set federal regulations for sports betting across the United States: The Supporting Affordability & Fairness with Every Bet Act (SAFE Bet Act) aims to reduce gambling related harms, addiction, and sets out federal standards for all sports betting operations both online and in retail locations.
Other Relevant Federal Laws
Travel Act of 1961
- Enacted: 1961
- Status: Still in effect
- This law criminalizes the use of interstate or foreign commerce (such as traveling or using the mail) to promote or engage in illegal gambling.
- Information
Bank Secrecy Act of 1970
- Enacted: 1970
- Status: Still in effect
- Requires financial institutions to keep records and file reports on currency transactions to prevent money laundering, which can be associated with illegal gambling operations.
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Gambling Devices Act of 1962
- Enacted: 1962
- Status: Still in effect
- This law restricts the interstate transport of gambling devices, such as slot machines.
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These federal laws shape the regulation of gambling in the U.S., with significant authority over online gambling, interstate betting, and the horseracing industry. Many of these laws remain critical in the ever-evolving gambling landscape, particularly as new technologies and platforms emerge.
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