The UK versus The USA Online Gambling Markets

The approaches to internet gambling regulation in the United States and the United Kingdom are opposed. Gamblers in the United Kingdom are protected from their own worst excesses by some of the world’s harshest rules and regulations, due to their country having the most established regulatory framework for online gambling of any country in the world. Because online gambling is illegal in the US, the sector has been driven underground, into the so-called “shadow economy.”

At first glance, it appears that gamblers in the United Kingdom have the most significant gambling addiction issues of anybody in the Western world. The United Kingdom Gambling Commission has the right to penalize gambling establishments that do not comply with the law. According to research done at British universities, students participate in a moderate amount of gaming activity. Simultaneously, gaming addiction is acknowledged as a problem by the broader population. GambleAware is one of the groups that call attention to problems in the system, such as the £100 maximum investment at fixed-odds betting terminals (FOBTs).

There is no regular flow of judgments and fines issued against casino corporations in the United States gambling industry. Studies come and go, but the vast majority of them focus on the impacts of gambling at land-based casinos. Because the unregulated gambling industry is ignored, the perception is created that it is either negligible or nonexistent.

Comparison of Gaming Laws in the United Kingdom and the United States

The Gambling Act of 2005 is the major piece of law in the United Kingdom that oversees the gambling sector. This piece of law created the rules and regulations regulating charitable gaming, prize gaming at traveling fairs, and the United Kingdom National Lottery, as well as remote gambling, land-based gaming machines, football pools, scratchcards, and the United Kingdom National Lottery. The bill established the UK Gambling Commission, which is in charge of auditing gambling establishments in the UK and enforcing prohibitions with fines that can reach millions of pounds.

UK Online Gambling Industry

The Gambling (Licensing and Advertising) Bill of 2014 imposed additional laws and limits on the online gambling industry in the United Kingdom. As a result, the Point-of-Consumption Tax, abbreviated as the POCT, was imposed. This tax targeted British gambling companies that had relocated to Gibraltar, Malta, or the Isle of Man to avoid paying higher taxes. The remote gambling sector was subject to a 15% point-of-consumption tax, requiring any enterprises that admitted British gamblers to pay the tax. The same law that allowed internet gambling raised the tax rate on online sports betting from 6.75 percent to 15%.

The gambling industry in the United Kingdom generates over six billion pounds, which is comparable to nearly half of the country’s total domestic product. It produces over £750 million in tax income each year and employs over 100,000 British nationals.

Remote Gambling Revenues in the United Kingdom

Internet gambling accounts for almost one-third of the total. According to the United Kingdom Gambling Commission, the yearly revenue from internet gambling in the United Kingdom is roughly £4.9 billion.

That is significantly greater than the earnings made by legal internet gambling in the United States, but only because the United States takes a more provincial and restricted approach to online gambling. While the United Kingdom strives for better regulation, taxes, and transparency, the majority of states in the United States would rather criminalize online gambling and disregard any problems that may occur as a result of unregulated internet gambling, which is unaffected by the present 46-state ban.

Online Gambling in the United States

The United States chose a different approach to internet gambling than the United Kingdom did at the same time that the United Kingdom began to regulate and tax its online gambling market. The Poker Boom was a phenomenon that arose in the online gambling sector of the United States following Chris Moneymaker’s triumph in the 2003 World Series of Poker Main Event. Millions of American gamblers have followed Moneymaker’s journey since he qualified for the World Series of Poker Main Event by participating in an online satellite event offered by PokerStars. In recent years, the income and visibility of online card rooms, casinos, and sportsbooks in the United States have increased dramatically.

Going mainstream may be a double-edged sword, as was the case with the online gambling industry in the United States. Members of Congress in the United States had become aware of the impact of online gambling by October 2006 and had begun to take efforts to restrict it. Congress acted on the wishes of socially conservative organizations and prohibited the practice in question.

The UIGEA was passed by the US Congress in 2006

The Unlawful Internet Gambling Enforcement Act (UIGEA) did not have enough support to become law on its own, but it was tied to the Safe Port Act, which prohibited non-American firms from holding American commercial ports. Because few members of Congress had the fortitude to vote against a so-called patriotic initiative, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law on December 31, 2006.

The Unlawful Internet Gambling Enforcement Act (UIGEA) criminalized all kinds of internet gaming, mimicking the Wire Act of 1961, which barred interstate telephone gambling. During the 1960s, the FBI used the Wire Act to accuse members of organized crime with racketeering violations. After determining that mafia racketeers had engaged in illegal sports betting through the phone lines, they would imprison those persons on racketeering and money laundering charges. During the Bush administration, the US Department of Justice regarded all kinds of gambling to be unlawful and hence barred all forms of online gambling through the Unlawful Internet Gambling Enforcement Act (UIGEA).

Some of the top online poker sites that have continued to accept players from the United States include PokerStars, Full-Tilt Poker, Absolute Poker, and Ultimate Bet. This resulted in the seizure of domain names on April 15, 2011, as well as the prosecution of executives working for online poker companies. The poker community in the United States called the incident “Black Friday” since it virtually destroyed the online poker market in the country.

State attorneys general questioned the notion that PokerStars and other companies violated the Unlawful Internet Gambling Enforcement Act later that year. Attorneys general from Illinois and New York asked Attorney General Eric Holder if the Unlawful Internet Gambling Enforcement Act (UIGEA) prohibited online casinos and poker sites. The Obama administration’s Department of Justice stated that the Unlawful Internet Gambling Enforcement Act (UIGEA) did not apply to online casinos and card rooms. This was because the 1961 Wire Act, which prohibited interstate telephone wagering on poker, blackjack, or slots, was never implemented. Because slot machine bets were never placed over phone lines, the Unlawful Internet Gambling Enforcement Act (UIGEA) does not restrict slot machines and other gameplay online.

Following that decision, several states in the United States moved to legalize, regulate, and tax online casino betting and poker. Legislative efforts to allow online gambling were successful in New Jersey, Delaware, and Nevada in 2013. Pennsylvania finally followed suit in 2017. Many states, including California, New York, Michigan, Illinois, and Connecticut, have proposed legalizing online gambling, but none have done so. The US Supreme Court’s overturning of PASPA in May 2018 cleared the way for lawful land-based sportsbooks and intrastate internet sports betting. Analysts think that more US states will authorize online poker and casino operations in the coming years. This is especially true now that PASPA has been overturned.

Gambling Regulations in the United States, as They Apply to Mobile Devices and Online Casinos

Internet gambling is outlawed in all but four of the states that comprise the United States. As a result, the underground online gaming sector represents the most promising market. Nobody knows how much money is earned by offshore gambling enterprises that are not legally permitted to operate in the country. There is a large decrease in tax revenue, although the precise amount is uncertain.

The online gambling sector in New Jersey generates around $250 million each year. There is a significant likelihood that at least 350 million dollars will be generated in Pennsylvania, which has 33 percent more people than New Jersey. While Delaware and Nevada generate essentially little money from internet gambling, California makes enough money from online poker to fund the gaming budgets of most major countries.

If most states in the United States legalize online casinos and poker sites, the US online gambling sector might grow to dwarf that of the United Kingdom. Even if only half of the states in the US legalized online gambling, the total market size would be significantly more than that of the United Kingdom. Geoff Freeman, the AGA’s President at the time, estimated in 2013 that Americans spent $3 billion each year on internet gambling, even though online gambling remained unregulated and unregistered in all 50 states at the time.

Online Gambling Attitudes in the United States and the United Kingdom

Because of the prevalence of a Puritanical inclination in American society, a sizable segment of the American populace continues to argue for the banning of “vices” or “sins.” Ironically, the migration of Puritans from England during the Great Migration of the 1630s and the Great Ejection of 1662 liberated the country from the puritanical consequences they had brought with them. Even though there are many similarities between the two countries, there are substantial differences in how they govern gaming legislation.

Both countries have large sectors devoted to land-based gambling. Many of the same interests involved in land-based gambling in the United States want the internet gambling business to stay unregulated and underground because they do not want to deal with competition. The politicians in the United States prefer to perpetuate the fiction that their restriction on internet gambling put an end to the activity, but in reality, it merely created the world’s largest underground gaming industry.