Federal gambling legislation loopholes land some companies in hot water

Playing games like online slots and poker for money is not currently legal on a federal level. Although, some states like Iowa and Connecticut are actively debating whether to legalize and regulate online slots and other forms of gambling on the internet at the state level. In 2006, the Unlawful Internet Gambling Enforcement Act was passed to put a stop to online gambling, but many believe the legislation does not properly address the matter and needs to be more clearly defined.

Last April, the U.S. government prosecuted three online gambling websites, including Absolute Poker, for offenses such as money laundering and illegal gambling. The Heartland Institute recently reported that Brent Beckley, co-founder of Absolute Poker, pleaded guilty to these charges. However, the Act creates many gray areas, according to some legislators and other gambling experts.

"The absurd Unlawful Internet Gambling Enforcement Act doesn't actually outlaw the act of playing poker online for money in the United States," Jim Lakely, co-director of the Center on the Digital Economy at The Heartland Institute, told the news source. "It only made it illegal for a player's winnings to be processed in U.S. banks. So it's not surprise American entrepreneurs were going to try to skirt that loophole in the law."

Do you think legislators should redefine the parameters of the Act? Would it possibly make more sense to legalize online gambling rather than trying to restrict it?

Published on 8 February 2012