The global gambling industry has exploded in terms of both revenues and popularity, thanks in no small part to the rise of online gambling. While players across the world have been keen to embrace the remote gambling revolution, casino and other gambling operators have built significant businesses in this space.
While the world at large enjoys gambling with very little restrictions, there are some notable exceptions. The most obvious is the United States, where online gambling remains effectively illegal for US players. While the laws are designed to restrict operators more than they are citizens, it has had a devastating impact on the gambling industry within the United States.
The American Dream, at least for gambling operators and gambling fans, would be to see a liberalisation of the laws currently in force stateside. With President Trump now in the White House, could the change of administration bring about a reversal of the current policy?
A (Recent) History of US Gambling Laws
The rise of online gambling posed challenges for law makers worldwide. While most came down on the side of regulation as the best model, the Americans were a lone Western voice in clamping down on online gambling altogether. For American citizens, there is no Federal restriction in place that prevents gambling online, although some conservative states do have their own policies in place. There have been no recorded arrests for placing bets online, and there have even been admissions that placing bets online as a punter is within the law.
The difficulty for American operators is the back-end restrictions, which prevent banks from handling money from illegal bets (i.e. bets that contravene state rules), as well as prohibiting operators from plying their trade within US jurisdictions. Sports betting is the most heavily regulated area, with prohibitions in online bets taken by both US and foreign-hosted sites from US customers.
There has been some appetite for a reversal in the law, including notably moves from a pre-presidential Donald Trump to capitalise on a relaxation of these restrictions. While there remains no firm direction of travel for regulators on this issue, it is far from a settled area of the law.
The Destruction of an Industry
The impact of these restrictions has been felt across the US gambling industry, which represents a tiny fraction of market share for online versus the equivalent in other countries. If you compare the US to the UK for example, the UK online gambling industry is significantly more developed, employing crowds of people in legitimate, tax paying corporations. Some have criticised the US move as hypocritical, given large land-based gambling resorts like Las Vegas and Atlantic City, but for the time being at least, it remains in force.
A liberalisation of laws on US gambling operators would see an explosion in the online gambling industry, as casinos, affiliates and other gambling stakeholders rush to claim a slice of this most prized of pies. But is there light at the end of the tunnel, or even the most distant of hopes these laws could be relaxed in the near future?
A Light at the End of the Tunnel?
New Jersey is one state that could be set to lead the way. In 2011, the state of New Jersey issues a reprieve from the restrictions set at the national level, which permitted regulated online casinos to operate from within the jurisdiction, provided they were hosted on servers located within Atlantic City. A 10-year trial programme was announced, with profits subject to a 15% tax. The New Jersey trial has been regarded as a promising development, showing the levels of tax money that could be raised by a more liberal approach.
The long-term direction of travel for the US will hopefully be towards a more relaxed future as far as online gambling is concerned, and there is good reason to believe President Trump could influence the law in this area. While clear opposition remains, there is still hope for the great American gambling dream to become a reality.
