In the late 1990s, online gambling became a popular pastime for Americans. It appeared to be an end run around government regulations, as operators could set up shop in an offshore jurisdiction and make wagers for anyone with a computer and a credit card. But as the popularity of online gambling grew, the United States Department of Justice and Congress began exploring how to regulate the industry. Until recently, however, neither of these bodies had adopted any formal regulations.
Although online gambling is legal on a federal level, different states regulate it differently. Some states have banned online gambling entirely, while others restrict it in some way. Geo-blocking is common, with most gambling websites using technology to prevent access to users from these countries. These laws vary, but generally, the motivation for making online gambling illegal is religious. For example, traditional offline gambling is prohibited in almost every country that is dominated by Islam. Other countries have not yet enacted legislation prohibiting online gambling or don’t have the infrastructure to do so.
However, the effects of Internet gambling on mental health have yet to be proven. Numerous studies conducted in Sweden have failed to support the assumption that internet gambling would attract people with gambling problems. Rather, offline gamblers report greater effects on their mental health and psychological well-being than their online counterparts. The DSM-5 has a new category of internet gambling disorder – Internet Gaming Disorder. This diagnosis has yet to be proven in the real world, but the concept is there.
New Jersey, Connecticut, Michigan, and West Virginia are some of the few states that have legalized online gambling. New Jersey is among the first state to allow a casino, and is one of the most competitive markets for online sports betting. Other states, such as Washington, Texas, and Rhode Island, have also legalized internet sports betting. As of January 2021, Virginia will also allow online sports betting. Despite the legalization of sports gambling, FanDuel and DraftKings have already launched.
However, online gambling has many disadvantages. While the growing popularity of online gambling has made it easier for people to gamble, there has been a steady rise in gambling disorders, especially amongst people who have a problem with gambling. The availability of electronic payment systems and the constant presence of gaming sites on a person’s screen could make it impossible for them to relax and sleep. Further, Internet gambling may lead to psychological problems, such as insomnia, depression, and other forms of dependency.
Although some states have decriminalized online gambling, federal law still prohibits it. Federal law, the Wire Act, governs wagering businesses. A violation of this law can lead to fines and even imprisonment. However, an exception to the Wire Act applies if the act is legal in the destination location. The Wire Act seems to encompass all telecommunications infrastructure. However, this law has not yet been interpreted to cover all wagering activities in the United States.