Online gambling is a general term for gambling using the Internet. This article provides a brief introduction to some of the forms of online gambling, as well as discussing general issues.
Online poker
Main article: online poker
Online poker rooms commonly offer Texas hold 'em, Omaha, Seven-card stud, and other game types in both tournament and ring game structures. Players play against each other rather than the "house", with the card room making its money through the "rake".
Online casinos
Main article: online casino
There are a large number of online casinos, in which people can play casino games such as Roulette, Blackjack, Craps, and many others. These games are played against the "house", which makes money due to the fact that the odds are slightly in its favour.
Online sports betting
Main article: sports betting
Bookmakers and betting exchanges offer fixed-odds gambling over the Internet on the results of sporting events.
Online bingo
Main article: online bingo
There are a number of online bingo rooms offering games on the Internet.
Mobile gambling
Main article: mobile gambling
Developments in the use of wireless, mobile devices to gamble follow in the wake of mainstream online gambling.
Funds transfers
Typically, gamblers upload funds to the online gambling company, make bets or play the games that it offers, and then cash out any winnings. European gamblers can often fund gambling accounts by credit card or debit card, and cash out winnings directly back to the card. However, most US banks prohibit the use of their cards for the purpose of internet gambling, and attempts by Americans to use credit cards at internet gambling sites are usually rejected. A number of offshore electronic money services, including Firepay, Neteller, and Moneybookers, offer accounts with which online gambling can be funded.
Payment by cheque and wire transfer is also common.
Legality
United States
The United States Federal Appeals Courts has ruled that the Federal Wire Act prohibits electronic transmission of information for sports betting across state lines but affirmed a lower court ruling that the Wire Act "'in plain language' does not prohibit Internet gambling 'on a game of chance.'"
Some states have specific laws against online gambling of any kind. Also, owning an online gaming operation without proper licensing would be illegal, and no states are currently granting online gaming licenses.
The Internet Gambling Prohibition Act of 1997 was passed by the U.S. Senate on July 23, 1998, by a vote of 90-10. However, it was not approved by the House of Representatives, partly due to lobbying of Jack Abramoff, so the act did not become law.
In March 2003, Deputy Assistant Attorney General John G. Malcolm testified before the Senate Banking Committee regarding the special problems presented by online gambling. A major concern of the United States Department of Justice is online money laundering. The anonymous nature of the Internet and the use of encryption make it especially difficult to trace online money laundering transactions.
In April 2004 Google and Yahoo!, the internet's two largest search engines, announced that they were removing online gambling advertising from their sites. The move followed a United States Department of Justice announcement that, in what some say is a contradiction of the Appeals Court ruling, the Wire Act relating to telephone betting applies to all forms of Internet gambling, and that any advertising of such gambling "may" be deemed as aiding and abetting. Critics of the Justice Department's move say that it has no legal basis for pressuring companies to remove advertisements and that the advertisements are protected by the First Amendment. As of April 2005, Yahoo! has provided advertising for "play money" online gaming.
In February 2005 the North Dakota House of Representatives passed a bill to legalize and regulate online poker and online poker cardroom operators in the State. Testifying before the State Senate, Nigel Payne, CEO of Paradise Poker, pledged to relocate to the state if the bill became law. However, the measure was defeated by the State Senate in March 2005. Rep. Jim Kasper, who sponsored the 2005 legislation, plans to introduce similar bills in the 2007 North Dakota legislative session.
In July 2006 the House of Representatives passed legislation that would make online gambling transactions more difficult. Titled the Internet Gambling Prohibition and Enforcement Act, it prohibits poker sites and other gambling companies from knowingly accepting money from US clients. This bill cannot become law, however, until approved in the Senate.
Also in July 2006, David Carruthers, the CEO of BetonSports, a company publicly traded on the London Stock Exchange was detained in Texas while changing planes on his way from London to Costa Rica.He and eleven other individuals were later indicted on various felony violations relating to BetonSports offering sports betting to U.S. citizens. While as noted above, a United States Appeals court has stated that the Wire Act does not apply to non-sports betting, the Supreme Court of the United States has previously ruled, in the case of Jay Cohen, that the Wire Act does make it illegal to own a sports betting operation that offers such betting to United States citizens.
Other countries
Various forms of online gambling are legal and regulated in many countries, including most members of the European Union and several nations in and around the Caribbean Sea.
The government of the island nation of Antigua and Barbuda, which licenses Internet gambling entities, made a complaint to the World Trade Organization about the U.S. government's actions to impede online gaming. The Caribbean country won the preliminary ruling but WTO's appeals body has partially reversed that favorable ruling in April, 2005. The appeals decision effectively allowed state laws prohibiting gambling in Louisiana, Massachusetts, South Dakota and Utah. However, the appeals panel also ruled that the United States may be violating global trade rules because its laws regulating horse-racing bets were not applied equitably to foreign and domestic online betting companies. The panel also held that certain online gambling restrictions imposed under US federal laws were inconsistent with the trade body's GATS services agreement.