New changes in the US gambling market

New changes in the US gambling market

May 2, 2014.

A bill introduced by Representative Jason Chaffetz, R-Utah, and Senator Lindsey Graham, R-South Carolina, may reverse the recent changes in the online gambling market in the United States. The proposed legislation would ban all forms of online gambling in the US, making the newly regulated online casinos in New Jersey and poker rooms in New Jersey, Nevada, and Delaware illegal.

The Decision That Started It All

The door to regulated online gambling in the United States started with a partial reversal of a previous interpretation of the Interstate Wire Act of 1961 by the US Department of Justice. The ruling clarified that the law only prohibits sports betting and no other forms of online gambling. This was enough to give states the go-ahead to develop their own regulated online poker rooms or casinos, given that their own laws permit them.

Things about to Change… Again?

Online gambling is finally getting some ground with new regulated sites in New Jersey, Nevada, and Delaware. But now, two legislators – Rep. Jason Chaffetz, R-Utah and Sen. Lindsey Graham, R-SC – are looking to roll it all back. If it passes, all forms of online gambling will once again be banned in all 50 states, including those that already have regulated online casinos or poker rooms.

Ethics or Business?

According to Chaffetz, this legislation is designed to allow for a more democratic approach to online gambling in the United States. “These fundamental changes need to go through Congress,” he said. “By restoring the original interpretation of the Wire Act, we are putting the genie back in the bottle and allowing for an open debate to take place.”

But there’s no doubt that there are commercial incentives for this bill: if it passes, it will ensure that online casinos do not threaten the multi-billion dollar land-based gambling industry in the US. In fact, Sheldon Adelson, CEO of the Las Vegas Sands Corporation, has been one of the top proponents of complete prohibition of online gambling in the US.

Still Uncertain Going Forward

The Chaffetz and Graham bill is not the only thing that could stop regulated online gambling in the US in its tracks. The Wire Act ruling could be reversed if it goes before the Supreme Court, which may happen if opposition strengthens in the legislature. 

At the moment, however, it looks like that more states are looking to get in on the online gambling industry. California, Oregon, and Massachusetts are already seeking ways to get a piece of the online gambling pie, and more states could follow soon.