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Online Casino Gaming: From Illegal Hobby to Mainstream Entertainment

The United States has a long and complicated history with online casino gaming. The growth of online casinos is due to the combined power of the internet and American attitudes towards gambling. Prior to the mobile smartphone boom, casino gaming was only available in sanctioned casinos like Las Vegas or Atlantic City or on a website hosted outside of the United States. 

As the internet became more popular, many people began to play these games online, first from their computers and now mostly from their smartphones. Early on these players often used dial-up modems that would connect them to servers located overseas.The smartphone boom has moved these casinos into the mobile world.

What is online casino gaming?

Online Casino gaming is any game of chance played through the world wide web, usually through a smartphone, for a wager. There are many online games, but for a game to be an online casino game, the stakes need to be real money. 

These online casinos offer most favorite casino games including Video Poker, Blackjack, Roulette, and more. 

What is the legal status of online casino gaming?

The legality of online casino gaming in the United States has changed drastically over time. 

It didn't take long after the creation of the internet for Online Casinos to pop up, many of them with servers hosted outside of the United States. Lawmakers took note of the growing number of online casino sites and introduced legislation to stop them. Over time, state legislatures started to carve out exceptions for users within their state boundaries 

When did online casino gaming become legal?

This is not an easy answer, in the United States, often state officials have a lot of operating power to decide what happens in their state. But The Department of Justice and other Federal Agencies can ban or bar online gaming. 

Gaming Legislation in the United States - A Timeline

Internet Gambling Prohibition Act

In 1999, the failed Internet Gambling Prohibition Act (IGPA) attempted to ban internet gambling completely. Often the Federal Wire Act was leaned on to determine if online gaming were legal or not. 

Federal Wire Act

The Federal Wire of Act of 1961 was clarified in 2001 to specifically say that interstate sports betting or contests did not violate the act. This created an opportunity for states to create their own regulations regarding online sports betting and online casinos. 

It started as an illegal hobby, then became legalized with Senate Bill 1291 in 2006, and finally, it was introduced to a fully regulated market by the Unlawful Internet Gambling Enforcement Act (UIGEA).

2006 Unlawful Internet Gambling Enforcement Act (UIGEA)

Nevertheless, this change in attitude occurred not too long ago. The U.S. government cracked down on illegal gambling websites within its borders (prior to 2006) and made it very difficult for Americans who wanted to gamble through an online site. Because there was no national framework for regulating or taxing such sites at the time, each state had different laws.

Changes to the Federal Wire Act

In December 2011, the DOJ released a legal opinion that the Federal Wire Act’s scope did not include wire communications for sporting events or contests. A DOJ reversal in 2018, declared that the act applied to all gambling and sports betting. 

While the DOJ was changing its stance on the Federal Wires Act, a few states were making legislative changes to allow online casino gaming.

2013 Delaware

The state of Delaware contracted with gaming operator company, IGT, to launch their first online casino games in 2013.

2013 Nevada

Nevada has often taken a protective stance towards their in-person casino industry, but even still, Nevada green-lighted online casinos with 2013’s AB 114

2013 New Jersey

It’s not surprising that New Jersey is found on this list. Gov Chris Christie signed Assembly Bill 2578 to enable the Garden State to begin offering online poker and casino games.

2018 PASPA repealed

Although the Professional and Amateur Sports Protection Act was established in 1992 and asserting that states, not the federal government, should regulate their own sports booking platforms. Although we have talked about this in our sports booking by state post, we can see that the repealing of PASPA had a liberating effect on states’ legislation and attitudes towards online gambling in a general sense. 

2019 Pennsylvania

The Keystone state opened the doors to online casinos, online sports betting and online poker. Specifically, with online casinos, The first online casinos in PA opened up in 2019

2021 Michigan 

The newest entry to the online casino industry, Michigan began offering online casino games in 2021. 

Which casino games have made the jump to online?

All the favorite games of chance are available on one casino platform or another including Slots, Craps, Roulette, Blackjack, Video Poker, and many more. 

What platforms are supporting online casino gaming?

There are countless online casino gaming applications. Check within your specific jurisdiction since these apps are very regional. 

What states allow online casino gaming?

New Jersey, Pennsylvania, West Virginia, Delaware, and Michigan are the 5 states that currently allow online casino gaming within state lines. 

Not all types of online gambling are treated the same. We posted previously about Online Sports Booking and New Jersey’s Gaming Compliance changes. In both of those, a common thread is: not all types of games are treated the same (EG: Sports Booking and Poker are not regulated the same).

For our discussion on mobile “games of chance” casino gaming, we are making the distinction between Poker and Casino games (which do include Video Poker). Check our blog again in the future for our upcoming article on Online Poker.. 

What does Location have to do with online casino gaming?

Location is everything for gaming operators who want to remain compliant with state legislation. With each new player, determining if a player is within legal jurisdiction is essential. We help our gaming operator customers do just that. 

How does LocationSmart help with mobile gambling compliance?

LocationSmart offers a comprehensive, real-time cloud-based multi-source geolocation service for online gambling, sports betting, and internet casino platforms.

LocationSmart offers the following for Gaming Operators:

  • Location Verification: Determine if users are in or out of a valid gaming area to allow for immediate transaction approval.

  • Interaction: Allows for geo-based "nudges” to the user that increase engagement within a selected geo area - based on your parameters

  • Compliance: Comply with state requirements for in-state or on-site geolocation verification.

  • Security: our secure API can be trusted to offer the "green light" within playing and wagering zones

  • Gamer Invitation: Notify users when in an allowed area to use your application.

  • Personalization: Custom communication to all or certain users based on location.

How does LocationSmart validate a gamer’s location?

  • IP Address - While often a gold standard for location, the use of proxies, satellite connections and vpns, obfuscates IP validations.

  • Browser Location - By using LocationSmart-provided code on the customer website, Wi-Fi, Cell site, GPS, and other signals can be analyzed to determine the best available location through the user’s browser.

  • Mobile App Location - Through a sophisticated SDK for use in iOS and Android apps, operators may access the most precise location information available along with device insights to assess its trust level.

  • Device Profiling - Device and connection data, as well as user behavioral heuristics - known fraud indicators - are all incorporated into the Device Profiling solution. It's a future-proof technology that may be leveraged via the cloud.

  • Geofencing - Our powerful API allows operators to determine whether a device is within an authorized space based on the device's location, accuracy, boundary conditions, and local regulatory demands.

About LocationSmart

We facilitate responsible online gaming fun with a focus on compliance. We assist our gaming company clients around the world to verify user location and receive the "green light" to wager.

Learn how LocationSmart helps with Internet Gaming Compliance and grab our Mobile Gaming Product Brief.

We keep our customers compliant with regulations and jurisdictions. Read our Gaming Best Practices White Paper.