USA Law and Practice Contributed by: Chao Yu (Charles Yu) and Greg Pilarowski, Pillar Legal
real-world currency, and the court determined that “Washington law does not limit a virtual chip’s value to whether it can be exchanged for cash or goods” and held that the “coins need no intrinsic pecuniary value – their value derives from their usability in ena - bling gameplay”. 3.3 Definition of Land-Based Gambling There is no specific legal definition of land-based gambling at the federal level. The term is generally used as an industry descriptor to distinguish in-person gaming from online or remote play. Each state defines and regulates the forms of gambling permitted within its jurisdiction through its own statutes and regula- tions. In practice, land-based gambling refers to gaming activities conducted at physical venues, including slot machines, table games, and card games such as poker. 3.4 Definition of Online Gambling There is no specific legal definition of “online gam- bling” at the federal level, but the UIGEA defines “unlawful internet gambling” as “place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.” The term generally refers to wagering or gaming activities conducted through the internet or electron- ic devices, including computers, mobile phones, and tablets. 3.5 Key Offences In the US, illegal gambling offences arise under both state and federal law, depending on where and how the unlawful activity occurs. Both federal and state laws impose criminal penalties against those who offer or promote unlawful gambling. For example, at the federal level, the Illegal Gambling Business Act (IGBA) (18 USC, Section 1955) provides that anyone who conducts, finances, manages, super-
vises, directs, or owns all or part of an illegal gambling business may be fined or imprisoned, or both. The statute defines an illegal gambling business as a gambling operation that: • violates the law of the state or political subdivision in which it is located; • involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of the business; and • has been, or remains, in substantially continuous operation for a period of 30 days or more or has gross revenue of USD2,000 or more on any single day. Merely participating in unlawful gambling is generally not a criminal offence at the federal level. However, at the state level, some jurisdictions criminalise the act of gambling itself, typically classifying it as a misde- meanour punishable by fines or short-term imprison- ment. 3.6 Penalties for Unlawful Gambling At the federal level, any person who “conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business” may face both criminal and financial penalties: • fines and/or imprisonment for up to five years (18 USC, Section 1955 (a)); and • seizure and forfeiture of any property, including money, used in or derived from the illegal gambling business (18 USC, Section 1955 (d)).
4. Licensing and Regulatory Framework 4.1 Regulatory Authority
In the USA, state agencies and tribal gaming com- missions serve as the primary regulators of gambling. Each state that permits gambling establishes its own gaming commission, control board, or lottery agency to license operators, enforce compliance, and over- see responsible gaming programmes. For example, in Nevada, the Nevada Gaming Control Board regulates and oversees the state’s gambling industry, while in
556 CHAMBERS.COM
Powered by FlippingBook