[Editor's note: Because the facts are different in every case, and the law is different in every state, this paper cannot constitute legal advice. If you have questions of a legal nature, please consult an attorney.]
Anyone who has driven from California to Nevada knows that different states have radically different regulations on gambling. It is believed, for example, that all wagers in the state of New York1 that are not part of the state-sanctioned lottery are illegal. In Texas, however, it is a defense to a charge of gambling, a class C misdemeanor on par with a speeding ticket, if:
(1) the person engaged in gambling in a private place;
- (2) nobody received any economic benefit other than personal winnings; and
- (3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.2
In other words, playing Texas Holdem in your friendly neighborhood poker game is probably legal. Assuming your neighborhood is in Austin. So, too, is the office pool for March Madness. Black Jack, on the other hand, is not because the “house” has a statistical advantage over the other players.
Internet gambling raises a series of questions that the law has not adequately addressed. If Texas residents use the Yahoo! Sports Tournament Pick’em for their private office pool, money is on the line, and Yahoo’s computers just happen to be in New York3, has a crime been committed in New York? I’d like to think a district attorney would never bother prosecuting the claim, but the cost of defending that charge would be high if he ever did.
What about federal law? Right now, federal statutes appear to address only gambling ships4 and the interstate transmission of wagering information.5
That may change. Introduced in the House of Representatives this past February, H.R. 4777, proposes to establish the Internet Gambling Prohibition Act. It is intended to prohibit certain activities by those in a gambling business in the jurisdiction of the United States or outside the jurisdiction of any nation.
It is worth noting that the term “bets or wagers” in this proposed statute requires an understanding that someone in on the bet will receive a greater value than the amount risked. Apparently, one-on-one bets of equal amounts by both parties would not be subject to this law.
I find it interesting that the law could empower governmental agencies to restrain or prevent any person communicating information assisting in the placement of certain illegal bets or wagers.6 That may mean that the Department of Justice could sue an otherwise legal website because it has a link to an illegal gambling site. That could make it harder for offshore gambling websites to advertise in the United States. It might also make it harder for websites that merely offer gambling tips7 from benefiting from that advertising revenue.
At this point, the proposed federal statute appears to be aimed mostly at people engaged in the business of gambling, not their customers. A brief perusal of case law also implies that criminal prosecutions tend to focus on the bookie. That does not mean, however, that their clientele are not criminally liable under state laws, or that federal statutes will eventually be created to go after the bettors. Tread carefully.
1New York consolidated laws, section 5-401, as shown on http://www.gambling-law-us.com/State-Laws/New-York/. I have no independent verification of this website.
2TEX. PEN. CODE, Section 47.0.
3This is just an assumption. I don’t know where Yahoo’s computers are.
418 U.S.C., Section 1082.
5Id. at, Section 1084.
6This is the proposed 18 U.S.C., Section 1084 (i).
7No such site comes to mind.
Hanging Shingle is a solo practitioner in the State of Texas. He writes about the legality of arguments in daily events and cases through his blog, Hanging a Shingle.
Post a Comment