US Gambling Laws
Gambling laws in the US vary from state to state, with a handful of federal laws overarching. The system is really a hodgepodge of jurisdictional nuances, with differing standards for the definition of gambling, licensure requirements, and regulatory oversight. Most states opt for one of two approaches: restrict gambling in all forms, or regulate and tax it. To complicate things even more, there seems to be a recent ground-swell of regulations that allow for online gambling and sports betting, so the entire landscape is currently in flux.
There are a few federal laws that any industry participant should be aware of. First, there is the Unlawful Internet Gambling Enforcement Act. This law actually applies to banks and other financial institutions. It is meant to be an anti-money laundering law that restricts such institutions from transferring funds to or from individuals or businesses when those funds are suspected of being tied to online gambling. Next, there is the Bank Secrecies Act, another anti-money laundering law. It requires certain businesses who deal with the exchange of money (like casinos, for example) to implement anti-money laundering processes and report suspicious activity to federal oversight bodies. The Bank Secrecies Act is also aimed at preventing the funding of terrorist activities. Finally, there are federal lottery laws that make it illegal for individuals or private businesses to run lotteries across state lines (the states essentially have a monopoly on lotteries and this law helps them to protect themselves from competition from the private sector).
States, of course, have their own gambling laws on the books and most gambling law enforcement happens at the state or local level. Most states have a lottery commission or some equivalent body that runs the state’s lottery (although, some states do not have lotteries at all). Lottery commissions also typically have oversite of charitable gaming, like bingo and raffles held at fraternal organizations. States that allow for regulated gambling, like casinos, typically have a gambling control board or some equivalent body. These boards are made up of industry experts and law enforcement personnel who are tasked with overseeing licensure and regulation of casinos, card rooms, gambling equipment suppliers, etc. Licensure is typically very expensive, with costly application fees, sometimes requirements that hotels be built in connection with new casinos, plus a ton of red tape (so legal fees for any licensed gambling organization will be very high).
Ultimately, any company or individual looking to get into gambling or gaming as business model needs to consult an experienced gaming attorney. There are a lot of hurdles in this industry, as well as some helpful loopholes, and the laws are ever-evolving. So, putting your money into a firm legal strategy is always a good bet.
