Is internet sports gambling legal?

The legality of online gambling is currently a very gray area. Some consider it to be illegal to wager over the internet or via telephone. Others say that the gambling operation itself is illegal if it is based on U.S. soil. Thus, online gambling sites operate offshore in the Caribbeans, Latin America and Australia. Many others believe that since the government has larger fish to fry and gambling cases are unpopular to prosecute. that they are often ignored unless they involve mobs and other crimes. Only three states-California, Louisiana, and Nevada- have explicitly made online gamblinjg illegal. However, no online gambler has been prosecuted, and chances are that you won't be the first. Just be sure to be aware of the legality issues involved and keep up to date with changes in law.

Recent rulings

Wire Wager Act

-This act prohibits using a wire transmission to foster gambling activities. However, the intent and meaning of this law is vague. Some have argued that this act explicitly outlaws internet gambling, while others have argued that the law doe not prohibit internet gambling due to the prevalence of wireless internet services. In addition, the legislation specifically stipulates that it applies only to those participating in the "business of betting or wagering." This could be interpreted to mean that only sportsbooks are liable to punishment, not the individual players.

Two important decisions were made regarding online gambling in April 2005. Chris Costigan, president of Gambling911.com, the industry’s premier sportsbook watchdog site, sums up the decsions nicely: “Firstly, the World Trade Organization upheld its decision in favor of Antigua, a tiny island nation that claimed the United States stymied its lucrative online gambling industry. Antigua contended that many online gambling operators left its jurisdiction as a direct result of the United States crackdown on operators and advertising venues. A more critical ruling involved the United Kingdom, which now allows gambling companies to take bets online from the UK. While England's stance on bookmaking is quite opposite of the United States, internet sports betting shops and online casinos were forced to operate offshore on nearby islands such as Gibraltar and the Isle of Man. The United Kingdom decision is viewed as a nod of approval by an industrial nation paving the way for internet gambling to thrive in a fully regulated environment, and the U.S. is most likely to recognize and respect its position.”

Tax Issues

Make sure you report any earnings when paying your taxes. You need not disclose that you have gambled online; simply play fair and report your net earnings as part of your investments.

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