US Now Says All Online Gambling Illegal, Not Just Sports Bets (bloomberg.com)

An anonymous reader quotes a report from Bloomberg: The U.S. Justice Department's decision that all internet gambling is illegal will cast a pall on the industry as businesses and state lotteries evaluate the implications of the change and the government's plans to enforce it. The U.S. now says federal law bars all internet gambling, reversing its position from 2011 that only sports betting is prohibited under a law passed 50 years earlier. Although the federal law specifically prohibits transmission of wagers and related information across state lines, the Justice Department's new interpretation will impact all online gambling because as a practical matter it's difficult to guarantee that no payments are routed through other states, said Aaron Swerdlow, an attorney with Glaser Weil Fink Howard Avchen & Shapiro LLP in Los Angeles.

The reversal was prompted by the department's criminal division, which prosecutes illegal gambling. The opinion issued about seven years ago that the 1961 Wire Act only banned sports gambling was a misinterpretation of the statute, according to a 23-page opinion by the department's Office of Legal Counsel dated Nov. 2 and made public Monday. The new reading of the law probably will be tested in the courts as judges may entertain challenges to the government's view of the law's scope, the Justice Department said. It may also affect states that began selling lottery tickets online after the 2011 opinion, as well as casinos that offer online gambling. In contrast, the Supreme Court last May "cleared the way [...] for states to legalize sports betting, striking down a 1992 federal law that had prohibited most states from authorizing sports betting."

Comments

Stocks

[backslashdot]

So investing in the stock market, or anything for that matter, is illegal?

Investing in anything has a risk/probabilistic component. Therefore it is a form of gambling. Well isnâ(TM)t it?

And donâ(TM)t retort with BS that playing blackjack online is 100% luck based .. it isnâ(TM)t. I mean, let me know randomly how clicking âoehit meâ for everything works out. All gambling takes some amount of skill to improve your odds.

Re:Stocks

[Anonymous Coward]

No, the legal definition of gambling specifically excludes any activity governed by the securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934[1] for the purchase or sale of securities (as that term is defined in section 3(a)(10) of that Act); or any over-the-counter derivative instrument; as well as insurance contracts

Re:Stocks

[Solandri]

There is actually a statistical difference between all of these.

• Stocks are (over time) positive sum. The total value of all stocks goes up over time, meaning on average stock investors are winners. So trading and investing in stocks is good for the economy.
• Same goes for savings accounts. They're positive sum. You make money (interest), the bank makes money (dividends from investing your savings). So it's good for the economy.
• Insurance is zero sum (negative sum if you subtract the cut taken by the insurance company). But the "winners" in insurance are people who suffer an pre-agreed loss. So insurance has the effect of minimizing individual deviations from the average. Minimizing deviations results in more economic stability (fewer bankruptcies), so it actually ends up a net gain for the economy.
• Gambling is zero sum (negative sum if you include the cut taken by the casino). On average, gamblers are losers. On top of that the winners are randomly distributed, so there's no benefit to the economy as with insurance. So gambling is on balance bad for the economy. (The only way it helps the economy is if you count its entertainment value as stress relief for the gamblers. But the few addicted gamblers who gamble too much end up counteracting this benefit on average.)

Re:What is the reasoning behind anti-gambling

[ledow]

I live in the UK.

In my last house (in quite a respectable area of London, famous for very posh schools etc.), the local high street was dead. There were a handful of shops.

What happened is that betting shops moved in. Dozens of them. At one point, six in the same street (which was only short).

The people going in are pissing away their money to fund an addiction. They've now had to introduce laws to reduce the maximum bet on a "fixed odds betting terminal" (fruit machine to you and me) to £2, because it was getting up to £100 for one spin in some instances.

To generalise, the clientele are generally unwanted - dozens and dozens of people who crowd the ATMs on the day when benefits (social security) are paid, draw it out instantly, and spend all day in the betting shops and drinking.

It's not everyone. I have what the British call "a flutter" occasionally, and I'm a mathematician too, so I can do the maths to tell you that you'll never win on average. But you don't really want your population gambling away money unless you own and tax the casinos so heavily that it's beneficial - even then, the social cost is enormous because the people who gamble the most are those that can't afford to.

Las Vegas is tainted because of this for me - I get that it's a part of the US culture in that area, and casinos are different to grubby betting shops, but the clientele are the same.

You'd think you could just tax it to oblivion to counteract any effect, but it does more than just encourage people to get into debt. It's an addiction. There are "gamble aware" programs, where anything advertising gambling has to offer certain functions (i.e. to let people "lock" themselves out of their account for a period of time, to encourage them to "gamble responsibility", and so on). In Italy and other places in Europe, cruise ships (which used to be seen as luxury liners for the rich) are now just regarded with condemnation because they are just used as offshore gambling and drinking dens, usually for British tourists!

The TV is full of adverts for bingo and casinos (online and offline). It's become "the norm" to be swamped in gambling advertising.

There's a big difference between someone playing a lottery once a month (what I'd say was analogous to, say, a village fete tombola) and high-level gambling establishments. Online can be dangerous - it's just a number on a screen.

Gambling will always exist. But it can lead to a degeneration if it's unchecked. I don't get the online/offline distinction but certainly controls need to be in place. The UK ditched most of the legislation about what can apply to be a casino or gambling establishment, and all it means is that the whole high street is just full of gambling places, and websites full of gambling ads.

I've gambled in Las Vegas. I've gambled on cruise ships (but the QE2 was the last of the luxury liners and wasn't gambling-focused at all, it was just a fancy evening dressed up). I know the odds and play games for a living. Hell I have a felt card table, card shoe and poker chips in my lounge as I speak... but even to me, unrestricted or lax gambling legislation has lead to an easily observable phenomenon and every-day news story headline... "My boyfriend stole our benefits to gamble away all our money, and now we're homeless".

I can understand them wanting to limit it. The ruling is a bit arbitrary, but gambling isn't as victimless as you might think. It's not the people losing the money they need to live that are hurt... they are suffering for their own stupidity. It's the knock-on effect on society.

Re:Practical Difficulty

[Richard_at_work]

I'm wondering at how wide the US is going to start casting its net on this - VISA, MasterCard not allowed to facilitate online betting anywhere in the world because they are US companies and online betting is illegal under US law?

If you think that's reaching, I suggest reading up on the case of the Danish man buying Cuban cigars from a German seller - the US confiscated the payment as it used the SWIFT network, and Cuba is under a US embargo...

Re: Only applies to online gambling crossing state

[illiac_1962]

Do loot boxes count?