Please enable JavaScript to view this website.

The Online Gambling Landscape

In 2006, Congress passed the Uniform Internet Gambling Enforcement Act (“UIGEA”), which “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law;” failure to comply with the UIGEA can result in up to five years in prison. ((31 U.S.C. §§ 5361–5367 (2006).)) Even after UIGEA was enacted, however, an underground desire to gamble over the web persisted. Just five years after UIGEA was passed, online poker represented a multibillion-dollar industry. ((Darren Rovell, Insider Breakdown of Poker’s Black Friday, CNBC (Apr. 11, 2011), https://www.cnbc.com/id/42649117.)) In 2011, marketing and advertising for online poker alone generated an estimated $200 million in the United States. ((Id.)) In response to the growth of this illegal industry, federal prosecutors effectively blocked the largest online poker sites from operating and indicted their founders and other top management in April 2011. To passionate poker players, this was known as “Black Friday.” ((See Martin Harris, Black Friday: Reliving Poker’s Darkest Day Five Years Later, pokernews (Apr. 12, 2016), https://www.pokernews.com/news/2016/04/black-friday-five-years-later-24506.htm.))

While the online poker industry is still reeling from the 2011 shakeup, a passion for gambling has endured. Today, wagering on live events, especially sports betting, is a massively popular activity that spawns a correspondingly immense market. It is estimated that, in the United States, 50% of people 18 and older will place a wager on a sporting event at least once in their life. ((Sports Betting, Sports Betting and Gambling Market/Industry – Statistics & Facts, Statista (2017), https://www.statista.com/topics/1740/sports-betting/.)) In 2015, Americans bet an estimated $95 billion on college football and the NFL, and about 96% of that money was wagered illegally. ((See David Purdum, Research shows U.S. could dominate global legalized sports betting market, ESPN (Sept. 9, 2015), http://www.espn.com/chalk/story/_/id/13614240/research-shows-united-states-dominate-global-legalized-sports-betting-market.)) Although definitive data pertaining to the size of the total market is mysterious due to the unlawfulness of the hobby, NBA commissioner Adam Silver agrees with valuations that conclude that $400 billion is illegally wagered on sports each year in the United States. ((Adam Silver, Legalize and Regulate Sports Betting, New York Times (Nov. 13, 2014), https://www.nytimes.com/2014/11/14/opinion/nba-commissioner-adam-silver-legalize-sports-betting.html?_r=0.)) For those looking to profit in this industry, there is a lot of money to be made.

To gain a share of the market, many online gambling sites with a focus on live action gambling have become popular. Bovada, for example, is a well-known website for online gambling and a popular sportsbook. Bovada operates out of Canada, and has a gambling license through the Kahnawake Gaming Commission in Canada. ((Top US Poker Sites Compared, Bovada Reviewed, Gaming The Odds, http://www.gamingtheodds.com/us-online-poker/sites/bovada-poker (last visited Oct. 16, 2017).)) In addition to Bovada, there are many other entities that run similar operations throughout the world that target American bettors. ((See generally Top Online Sports Books, Odds Shark (last visited Oct. 16, 2017), http://www.oddsshark.com/sportsbook-review.))

Currently, data on the size of the American online gambling market is difficult to obtain. But, in Great Britain, where laws pertaining to online gambling are more lenient, online gambling accounts for 33% of all the gambling activity in the region. ((New figures show online gambling is largest gambling sector in Britain, Gambling Commission (Nov. 24, 2016) http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2016/New-figures-show-online-gambling-is-largest-gambling-sector-in-Britain.aspx.)) If that percentage is extrapolated to the American online sports betting market, and if Adam Silver is correct that illegal sports gambling is a $400 billion operation, then the online sports betting industry alone easily represents a multibillion-dollar market. Moreover, Bovada and other sites offer other forms of live action betting, and even offer casino-like game betting. ((See generally Odds Shark, supra note 9)). Indeed, an absolutely immense amount of money is presently bet online.

While Bovada and other similar sites operate in a legal gray area, as of now, no individual United States citizen has ever been arrested, indicted, or prosecuted under federal laws for gambling online. ((Legal Online Sports Betting, Bovada, https://sports.bovada.lv/content/legal (last visited Oct. 16, 2017).)) With little risk of punishment for players, online live action gambling will continue to be a popular activity, and companies seeking to profit off of bettors will continue to exist. And, with gambling effectively woven into the fabric of American society, debate rages around whether it’s even worth pursuing legal action against these international websites. ((See James Glanz, Agustin Armendariz, & Walt Bogdanich, The Offshore Game of Online Sports Betting, N.Y. Times (Oct. 25, 2015), https://www.nytimes.com/2015/10/26/us/pinnacle-sports-online-sports-betting.html.)) In the past, efforts to shut down similar sites have been “tantamount to cutting off a lizard’s tail only to see it grow again.” ((Id.))

The following two tabs change content below.