No other country in the world has such a complex and multifaceted legal situation regarding gambling as the United States of America. Legal areas such as the legalization and regulation of casinos and lotteries have been the responsibility of the individual states for decades.

Since 2018, the states have been allowed to decide on the legality of sports betting on an individual basis, the US gambling world is currently changing faster than ever before.

Different laws in different US-States

In 1787, the Constitution of the United States of America established the United States as a federal republic in the form of a presidential system. An important part of this constitution are the ten amendments, the Bill of Rights, which were passed two years later.

The legal basis, according to which each US state may pass its own laws over and above the Constitution, is defined in the 10th Amendment. 

Federal laws that are not laid down in the Constitution are thus categorically illegal. Nevertheless, there have been repeated cases in the past where the Supreme Court of the United States (Surpreme Court) had to decide.

The gambling sector, or more precisely sports betting, was a model precedent in 2018. Since 1992, there has been a nationwide ban on all betting activities, which was laid down in the so-called “Professional and Amateur Sports Protection Act” (PASPA).

Goodbye PASPA – the market for sports betting is open

The fight against PASPA began in the state of New Jersey in 2011, where the state wanted to legalize sports betting in order to improve the economic situation of state casinos and race tracks. The vast majority of the population voted in favor of legalization and the law was amended one year later.

However, PASPA had strong supporters in sports and, in addition to the National Collegiate Athletic Association, the four major leagues (National Basketball Association, National Football League, National Hockey League, Major League Baseball) challenged New Jersey’s amendment in federal court.

New Jersey subsequently sued PASPA for violating the Tenth Amendment, but the lower courts dropped the suit and the Supreme Court refused to hear an appeal. Two years later, when New Jersey cleverly rewrote the previously enacted law to legalize it, the same case came before the courts again.

However, the Supreme Court itself did not take up the matter until June 2017, and for eleven months the PASPA was discussed and analyzed before the final decision was finally made in May 2018 that the Act was indeed unconstitutional.

Since May 14, 2018, the legalization and regulation of sports betting has therefore been a matter for the states, which some of the states have taken advantage of to immediately allow sports betting throughout the state.

Lost tax money due to offshore gambling

The greatest incentives for the various states to completely legalize sports betting are the tax money that can be collected as a result and the fight against illegal gambling with foreign providers.

According to estimates by the American Gaming Association, between 150 and 200 billion US dollars have so far flowed into the illegal gambling market every year. However, in order to stop this flow and redirect the money towards the American state coffers, further important steps are necessary.

In an interview with the news channel NBC News, Jennifer Roberts from the International Center for Gambling Regulation at the University of Nevada gave a concrete statement on this issue:

„To ensure that the 200 billion US dollars no longer flow into the foreign market but into legal channels, we need a legal framework that allows online betting, mobile betting and in-play betting throughout the states. Sports betting must not be restricted to casinos or race tracks.“

Furthermore, it is also important that the level of taxes does not impair the attractiveness of legal gambling. Regulated providers must therefore be given the chance to compete fairly with foreign competitors.

Also, the major sports leagues, the majority of which still position themselves against sports betting, must be protected. Accordingly, further measures would have to be taken in order to preserve the integrity of sport, quite in the original sense of PASPA.

Complicated US casino landscape

While it is only since 2018 that the individual federal states can decide for or against sports betting, there were already very individual regulations on other areas of gambling, especially on land-based casinos, lotteries and gambling on ships.

The legal situation could not be more diverse, because while some states deal very liberally with all forms of gambling, in others any form of gambling is prohibited, with the exception of Indian casinos, which are always legal in Native American settlements and reservoirs and are not subject to US legislation.

If you are caught gambling outside the Indian territories, you may be subject to severe penalties. In Alabama, for example, you can lose your right to vote and pay a $15,000 fine.

Then again, there are states in which gambling is only permitted on ships, the so-called riverboat casinos, which sail in the direction of foreign waters, where US law is also not applicable. These include Texas, Missouri, Mississippi, Georgia, Illinois and South Carolina.

A few states also allow slot machines to be set up in pubs and bars, but only on condition that the machines do not pay out real money, but rather a winning receipt that can be exchanged at the cashier’s desk. Such machines are located in Montana, Rhode Island Oregon, West Virginia and South Dakota.

Not all states are quite happy about the change, and changes may be slower in some states than in others. In a few states like Alabama there are constitutional bans on sports games that must be lifted before they can attend a legalization in these states. Also, Florida still has a long way until legalization of sports betting as states.

Interesting exceptions

Some of the states where gambling is restricted or unrestricted have very interesting official regulations. In Arkansas, for example, there are two official casinos with electronic slot machines. Pure gambling is illegal, but games of “skill and judgment” are allowed.

The slot machines in Arkansas’ gaming establishments therefore work with a trick. After the first spin, the player can keep one of the symbols on the reels in order to roughly calculate the chances for the next spin. Since the games of video poker and video blackjack work on the same principle, you will find them very often on slots as well.

Also, in Arkansas, the laws against gambling are very outdated and have not been revised since 1967. As a result, illegal gambling is punished with only 10 or 25 dollars and the law is not applicable to gambling on the Internet.

The state of Massachusetts, on the other hand, is very precise and has allowed three casinos spread over three geographical regions and a so-called “slot parlor” since 2011. This is an establishment on a race track south of Boston.

In North Dakota, on the other hand, there are 800 casinos where Blackjack can be played. However, the possible betting amounts are always between $1 and $25 and the proceeds go largely to charities.

The most famous are, of course, the casinos in New Jersey, which are all located in the famous coastal city of Atlantic City, and the casinos in the state of Nevada, spread over the cities of Reno, Lake Tahoe, Laughlin and Las Vegas.

In many states of the USA, it is quite likely that gambling as a whole will expand and develop further. However, there can be no uniform laws across states due to the constitution, which is why the gambling situation will remain very complex in the future.

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