Online Gambling and Prohibition

On April 15th 2011, now known in the internet gambling industry as ‘black Friday,’ the US Department of Justice and Homeland Security seized the domains and assets of four major online poker sites. Eleven people were indicted and bank accounts frozen. Enforcement of federal regulations against online gambling had been somewhat lax during the Obama administration and many wondered why an administration perceived by many as liberal would suddenly clamp down on a victimless crime.


Bingo Under Duress

The DOJ then turned their attentions to bingo sites. The World Bingo Network shut up shop before the US government could move on their operations but unfortunately Funtime bingo met the same fate as the poker operators. Bingo news sites around the world reported the seizure and unfortunate players trying to access the site were met by a DOJ logo and a message stating that the site had been seized. Other agencies involved in the seizures include the US Immigration and Customs Enforcement and Homeland Security Investigations. What online gambling has to do with homeland security is somewhat of a mystery. The legal actions against the poker and bingo sites took place in New York and Maryland.


Internet Gambling in the U.S.: An Overview

Internet gambling laws in the United States are complicated and somewhat vague. While internet gambling is not in and of itself illegal, processing gambling related transactions is illegal. Many internet bingo providers have taken the recent actions as a sign of things to come and have totally withdrawn from the US gaming market. Some bingo sites are keeping players updated on their Facebook fan pages and players can find out about the status of their accounts. The World Bingo Network issued a statement that read in part “It is very apparent from the US Governments actions that the debate into legalizing online gambling is far from over, and any and all operators targeting US customers are walking on very thin ice. The US Government has made it quite clear with these latest seizures that they intend to pursue US facing gambling operators that ignore US legislation.”


State vs. Federal Regulations

Currently several individual states are considering the legalization of online gaming to residents. Access to games would be limited to those living within the state’s borders to avoid federal regulations. Gaming experts believe that if enough states follow suit that legalization on the federal level is inevitable. As history has clearly shown; prohibition has never worked and creates more problems than it solves.

For our previous coverage of the hypocrisy of the UIGEA, click here.