While online sports betting is a favorite pastime in many countries, it’s no longer an option in the United States. This is after a reversal of the Wire Act of 2011 that had previously allowed sports betting in a limited way in US territory.
Most Americans have probably placed a wager or two on a horse race or a football game, knowing there was some dubious legal ground there. The online space was always friendlier to these sorts of ventures, though, especially when protected under the Wire Act. This law previously held that gambling was allowed when transactions did not cross state lines. This provided some protection to online casinos, sports betting and the like. They could operate solely within the state and be okay as far as the law was concerned.
That’s not true anymore, as a new interpretation of the same law is being put forth that says all online gambling is prohibited, whether it crosses statelines or not. This is something that will likely be fought in court and will need to have further clarification before it is fully settled, but for now it is bad news for the US’ online gambling industry. Sports betting is still big business in many countries, but the gambling companies are missing out on a large section of the global population which could be participating in their industry.
There are still plenty of places online where gambling aficionados can bet on horse races, play some online pokies or be dealt a few hands of blackjack with real world stakes involved. It’s simply not happening in the US anymore. These kinds of betting activities are very popular in the UK, Australia and many other parts of the world, so it’s a shame that Americans can’t enjoy the same things that everyone else is.
This is going to some effect on the way the industry grows and the way investments are made. There is a cap on how far the market can grow if the US is not involved in any way. The way the law is phrased right now, US citizens cannot even use websites hosted by other countries to play online casino games or do sports betting in their own country. They may even be in legal trouble if they go abroad, do some online sports betting there and then transfer the money to their US account. A lot of the industry is playing this very safe right now and trying to avoid any legal action being taken against them as a result of overstepping the bounds of the law. The details of how all this will work and how it will affect individuals and corporations will be clearer in the future, we can only hope, but for now, inlight of the new reversal, most people in the industry are just sitting back and waiting. They are careful not to deal with the US at the moment and hoping that the law will once again swing in their direction some time in the future.
We have already seen casino operators take a hit as the news broke about the Wire Act. Share prices are falling as a result. We can expect them to fall even more as the news spreads and the effect becomes more substantial. Long-term growth in the market becomes difficult after a big hit like this, and we are even seeing an effect on the sale of online lottery tickets.
So, what exactly does this mean for sports betting? It means that it will become a more niche market than what it was before and that even advertising to US residents could be problematic. It also means that online betting sites have to carefully vet their customers to ensure they are not getting anyone from the US. This means doing IP checks and trying to find work arounds for when site visitors use IP blockers or otherwise try to hide their physical location.
It’s much easier for the US government to crack down on entire companies and industries than it is for them to target specific individuals, so the online betting companies are goingto take the biggest hit here. They are the ones that have to be the most careful with how their way forward is being handled.