U.S. States Increasingly Turning To Internet Gambling

Internet gambling legislative activity in the United States has significantly increased compared to last year, driven partly by a new spin on an old federal law used to discourage states from legalizing Internet gambling.

Late last year, that law, the Interstate Wire Act of 1961, was the subject of an Obama administration memo clarifying that the act effectively allows most states to authorize forms of Internet gambling other than sports betting.

According to U.S. Internet Gambling Regulatory Tracker, GamblingCompliance’s proprietary legislative monitoring service, nine states have considered whether to legalize or prohibit some combination of Internet poker and casino gaming in 2012, up from seven states last year.

So far this year, two states have introduced legislation authorizing poker, six states have introduced legislation authorizing some combination of poker, casino gaming and lottery, and one state has enacted legislation expressly prohibiting Internet gambling.

In 2011, by contrast, three states introduced legislation authorizing poker, three states introduced legislation authorizing some combination of poker, casino gaming and lottery, and one state enacted legislation authorizing poker.

Meanwhile, the number of states mulling entry into interstate or international Internet gambling compacts increased, as the administration’s Wire Act memo eased concerns about the legality of interstate data transmissions relating to forms of gambling other than sports betting.

This year, legislation in five states included provisions addressing cross-border compacting, up from three states in 2011.

Notably, the number of states considering whether to place Internet gambling operations under governmental control has also increased due largely to growing interest from state lotteries in Internet gambling expansion.

This year, legislation in three states included provisions giving partial or full control over Internet gambling operations to a state lottery or a state-run corporation. Such provisions, however, did not appear in any Internet gambling legislation introduced last year.

Just as in 2011, legislative activity this year has not been confined to a particular region of the country, though lobbyists interviewed by GamblingCompliance believe that the enactment of legislation in Delaware or New Jersey could touch off a lightning round of Internet gambling adoption in the densely populated Northeastern corridor.

According to data from U.S. Internet Gambling Regulatory Tracker, Internet gambling is authorized in two states or territories and expressly prohibited in nine states.

Currently, 19 state legislatures are still in session, and Internet gambling legislation is pending in four states.

Looking ahead, one state is set to imminently award the first Internet poker license in American history, while another is preparing to roll out an express Internet gambling prohibition.

Click here for more information on U.S. Internet Gambling Regulatory Tracker, and download an executive summary here.