On June 6, 2013, Rep. Peter King (R-N.Y.) introduced legislation that would legalize online gambling at the federal level. According to media reports, The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 establishes a federal regulatory regime for online gaming, including a uniform set of controls and protections to prevent underage and compulsive gambling. Entities offering online gambling without a license would face penalties. The legislation also reportedly includes an “opt-out” provision for states that choose to prohibit online gambling or operate exclusively intrastate gaming within their borders. The legislation could represent a significant step in clarifying the legality of airing advertisements for online gaming.
Since the Supreme Court’s landmark decision in Greater New Orleans Broadcasting Ass’n v. United States, and subsequent FCC and DOJ enforcement statements, broadcasters have been free to air truthful advertisements for lawful, brick-and-mortar casinos regardless of whether the broadcaster is located in a state that permits casino gambling or prohibits it. Because Greater New Orleans was decided at the dawn of the internet era, the FCC has yet to issue an affirmative opinion on the legality of online casino advertisements. Nevertheless, the same case precedent and agency interpretations that legalize brick-and-mortar casino advertising apply with equal force to broadcast advertisements concerning legal online casinos.
That broadcasters may air truthful advertisements for legal online casinos is supported by a recent DOJ decision. For many years, the federal government considered most online casinos unlawful under the Interstate Wire Act. Until recently, the DOJ’s Criminal Division interpreted the Wire Act to forbid interstate transmission of bets or wagers (or information assisting in placing such bets or wagers) of all kinds, including bets or wagers made on online poker and other casino-style games. As a result, criminal charges and other legal proceedings were brought against a number of online gambling websites that allowed users to take part in for-money gaming.
On December 23, 2011, however, the DOJ’s Office of Legal Counsel (OLC) issued a memorandum opinion essentially overruling the Criminal Division and making clear that “interstate transmission of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.” The Wire Act, in other words, applies only to sports betting. Online casinos and other gaming websites that do not offer sports betting were thereby removed from the specter of liability under the Wire Act.
States have also begun passing laws relating to online gambling. Legislation legalizing online gambling (to varying degrees) has been passed in three states: Delaware, Nevada, and New Jersey. Similar legislation is pending in several other states, including California, Florida, Massachusetts, and Texas. Utah has enacted legislation prohibiting online gambling, while states such as Maryland, Michigan, and Washington are considering following suit.