Online Casino Spotlight

Indiana is one of the newest states to partake in the riverboat gaming trend. As of 2010, the state of Indiana only allows riverboat gaming, racetrack wagering and the Hoosier lottery. Although new, the structure of the gaming commission is consistent with other neighboring states.

As a result, a limited number of gaming licenses are issued each year. The state permits up to 11 gaming licenses to be issued only to counties along the Ohio River, Patoka Lake and Lake Michigan. All other areas of the state that contain a body of water cannot acquire a license.

The Indiana Gaming Commission reports directly into the Governor and is a segment of the executive branch. The commission board consists of seven total members appointed by the Governor. The requirements of the board members include:

• One member must have a background in law enforcement
• One member must be a CPA
• One member must be a lawyer in Indiana
• Three members must be from a county on the Ohio River
• Three members must be from a country on Lake Michigan
• The final member can be from any other county

The seven members of the board serve a three-year staggered term. Also, to keep balance within the commission, no more than three board members can be of the same political party. Although separate from the Indiana Gaming Commission, the State Police are also involved by conducting background checks and investigations for those applying for a gaming license.

The commission also controls racetrack wagering, the Hoosier lottery and charitable gaming. The riverboat gaming companies must pay the commission $3 per person admission tax from each vessel on a daily basis. Additionally, adjusted gross revenues are taxed at a 20 percent state tax rate.

One interesting rule implemented by the commission in 2003 is the Voluntary Exclusion Program. This allows citizens to be excluded from any gaming-related activities, mailers and hand-outs from a casino. The individual can sign-up in person at any Indiana casino or an Indiana Gaming Commission office. The terms are for one-year, five-years or a lifetime.

The Indiana Gaming Commission follows a similar structure to other riverboat gaming states. Although limited, the commission has a tight hold with strong regulations to ensure compliance. Due to the newness of the gaming concept to Indiana, perhaps in the future they will expand their authority to permit land-based casinos into the state.

Atlantic City, New Jersey is the gambling Mecca of the East Coast. Just a short distance from both Philadelphia and New York City and in the heart of the biggest population belt in the country, Atlantic City continues to attract millions of players each year. However, it does not share the same regulations as Nevada.

This is primarily due to passing laws that permit gambling in the state much after Nevada. Also, prior to the laws being passed, there were several types of gambling already authorized. The laws were passed later due to the long history of organized crime in the state. Officials worried about regulating a clean gaming business.

At the time, Nevada gaming held a reputation of being captive in the industry. New Jersey wanted their establishments, workers and overall standards to lead the industry and consistently be exemplary. To some extent, they were successful in following their blueprint. As time passed, the gaming laws loosened allowing casinos to increase advertising and reduce labor by eliminating specific functions.

The state level is divided between an investigating office under the Attorney General and an adjunctive function. The structure is modeled after Nevada. The two departments are divided into:

• The Casino Control Commission
• The Division of Gaming Enforcement

The Casino Control Commission licenses all casinos, their employees and the numerous firms the casino conducts business with. The commission consists of five members, three cannot be from the same political party and falls under the jurisdiction of the Department of Treasury. The members are appointed by the Governor for five-year terms.

The Division of Gaming Enforcement falls under the Attorney General’s Office. They are responsible for investigations regarding licensing applications as well as prosecuting violations prior to the commission.

Since the two agency system reviews the regulatory process, they are greatly valued in New Jersey and Nevada. Unfortunately on occasion, there are conflicting views and practices between the two agencies. In some cases, the commission will question the staff of the division and vice-versa. This causes resentment towards the other party.

The members on the board of both agencies must adhere to strict post-employment policies. They are usually not allowed to work in any type of casino-related job. This is an attempt to eliminate any type of link between the regulatory bodies and the casino industry. Like Nevada, New Jersey has an exemplary casino regulation system that continues to keep balance in the state.

As the oldest and largest legalized gaming center, Nevada currently regulates 500 casino licenses and manages 1,800 slot licenses, 1,360,000 slot machines and 5,300 table games across the state. 45 percent of Nevada’s revenues derive from gambling. They hold the largest share of state revenue originating from the gambling market.

Nevada first legalized gambling in 1931 during the Great Depression as a method of simulating the economy. Unfortunately the gambling industry in the state didn’t take flight until after World War II. Since this point, the gambling industry in Nevada has survived investigations, organized crime and numerous other shots to its reputation.

There are two regulatory bodies that oversee gambling in Nevada. These include:

• The State Gaming Control Board
• The State Gaming Commission

The State Gaming Control Board is the administrative section of gaming regulation. They handle licensing investigations, enforce gaming laws and regulations and collect and monitor taxation. Also, they are prosecutors in legal battles.

The Board has three members; a CPA, an individual with a law enforcement background and a member with a business administration background. These three members are appointed by the Governor of Nevada and serve full-time, four-year staggered terms.

The State Gaming Commission makes all decisions on gambling policy and regulations. They have the power to issue, deny, suspend, restrict, revoke and limit gaming licenses. The Gaming Commission also institutes disciplinary actions to those that do not follow the rules. This board consists of five Governor-appointed members that serve part-time.

In Nevada, two different types of gambling licenses exist. These include:

• Restricted licenses
• Unrestricted licenses

Restricted licenses limit the number of slot machines in a casino to 15 and prohibit the operator from offering any other type of game. These licenses are generally issued to small bar owners, restaurants and grocery stores. A regular investigation is required for the issuance of these types of licenses.

Unrestricted licenses allow the casino to offer slots, gaming devices and table games. To acquire this type, a thorough background investigation is conducted by the Gaming Control Board. The Board then refers its findings and opinion to the Gaming Commission. They make the final decision of acceptance.

Nevada is the model of gaming regulation and law for the rest of the United States and even the world. Although it may seem simple, it is difficult to acquire a gaming license in Nevada without a squeaky-clean background.

Louisiana allows many different types of gaming. Therefore state government agencies must keep a watchful eye over the numerous operations. Due to these choices, the government initially created several gambling regulatory agencies. The types of gaming allowed in Louisiana include:

• Horse racing
• State lottery
• Video poker machines
• Riverboat gambling
• Land-based casinos

In the early 1990’s, the Louisiana government created the Indian Gaming Commission. Shortly after, a law was ratified allowing one land-based casino to open in New Orleans. Since these laws were passed, only one land-based casino has opened for business. Casinos can legally offer most games that can be played for money with the exception of bingo, video bingo, television bingo, raffles, charity games, lottery, pull tabs, dog race wagering and sports books.

Louisiana began with a multitude of gambling regulation agencies. The Gaming Enforcement Division of the Office of State Police (a section of the Riverboat Gaming Commission) controlled video poker and riverboat gaming. The Louisiana Economic Development and Gaming Commission regulated the land-based casinos.

In 1996, the state government revamped the agencies. The Gaming Control Board managed riverboat, video poker, casino and Indian gaming operations. The Governor appoints the nine member board with recommendations from different universities within the state due to the diversity in criteria such as professional, educational and geographic.

One of Louisiana’s gaming attractions is riverboats. Legally, there are only 15 riverboat gaming licenses in the state of Louisiana that exist. The licenses are issued with a five year expiration date and then must be renewed each year thereafter. Also, on each vessel, a maximum of 30,000 square feet can be allocated to gaming. Furthermore, riverboat gambling may only occur on designated waterways throughout the state.

The only land-based casino in Louisiana is located in downtown New Orleans at the Rivergate Convention Center. The single license was awarded to Harrah’s. All card, mechanical, electronic and dice games are permitted with the addition of wagering on horse races.

The single land-based casino must pay 18.5% of gaming revenues or $100 million to the state each year, whichever is greater. There’s a 3.5% license fee of gaming revenue for vessels and a 15% annual franchise fee. Also a $50,000 flat fee, per vessel for the first year and $100,000 per vessel thereafter has been enacted. Many local governments also enforce a $2.50 per person charge on the riverboats.

Due to the number of gaming operations, Louisiana must have a high tax structure with strict gaming rules. Perhaps in the future, the Gaming Commission will vote to allow more than one land-based casino operate within the state boundaries.

Gaming regulations vary greatly depending on the region, state, city and town within the United States. Some states only allow gaming on Native American reservations, others permit only video based games and others allow any type of betting to occur at any establishment. Although not generally known, Montana allows gambling in a few different types of settings. These include:

• Video poker
• Video keno
• Live card games
• Sports pools
• Casino nights for non-profits

Montana has a long history of slot machines, blackjack and roulette. When gambling was made illegal, it wasn’t enforced by authorities in Montana until the late 1940’s. Once the State Supreme Court found it illegal, it took over 30 years to make a comeback. The Gambling Control Division was established in 1989 and they license, audit and enforce laws within gaming establishments.

Prior to the creation of this division, gaming was regulated on a local basis. Local governments had the ability to levy a gambling tax and lower the number of machines in the area. The Gambling Control Division collected all revenues, taxes and laws into a single governing body.

The gambling tax is split two-thirds to the state government and one-third to the local government. The state governing body allowed local agencies to extend gaming closing hours and restrict gambling in specific geographic areas by utilizing local zoning regulations.

The Gambling Control Division within the state of Montana employs only 36 individuals. Aside from creating gambling laws, they also test different gaming machines against the standard. Also, they grant, deny, renew, revoke and suspend licenses through a judicial review. Within the division is an auditing branch that examines tax records and scrutinizes other financial issues. Their primary focus is compliance of the law.

There are currently 11 total states that have gaming commissions but do not allow casinos. In many of these states the commission only overseas charitable, non-profit gaming. Other states regulate Native American gaming, card clubs and various smaller-scale gaming operations.

Montana is a unique gaming state in that it doesn’t allow any casino’s; only smaller establishments. These are highly-regulated and taxed at the federal level. Many of these establishments are in taverns that offer video poker, keno, card games and sports pools. Others, such as fundraisers (non-profit) are also regulated. Perhaps one day the gaming commission will elect to allow casino operations into their state.

Like many other states, Colorado has stringent gaming laws limiting the availability of specific games to the public. Colorado only offers specific types of betting games in designated areas of the state including the following historic towns:

• Central City
• Black Hawk
• Cripple Creek

This decision was made into a law in 1989 and only allowed blackjack, poker and slot machines with a maximum bet of five dollars to be wagered. Central City and Black Hawk are in the North Central section of the state approximately 37 miles from Denver. Cripple Creek is in the center of the state, just outside Colorado Springs.

The agency overseeing gaming is the Division of Gaming and the Colorado Limited Gaming Control Commission with The Department of Revenue as the supervisory body. The Division of Gaming distributes gambling licenses and regulates the behavior of the industry.

The Governor appoints five members to the Gaming Control Commission which is corroborated by Colorado Senate. Only three members can be of the same political party with only one from per congressional district. The members must have an attorney, public accountant, a management-level business person, a law enforcement officer and a registered voter not in the industry of the other four members.

The four members of their specific professions must have five years experience in their industry. All terms are staggered with no single member serving more than two terms.  The commission propagates all gambling regulations, establishes the gaming tax, allots funds to various state departments and designates fiduciary power over the Division of Gaming.

Additional functions include collecting license fees, adopting and enforcing regulations as well as research and development and conducting investigations of gaming in Colorado. The tax structure for casino properties within the state is up to 18 percent of revenue depending on the size of the operation. There is also an annual tax on gaming licenses.

There are many rules and regulations in place to keep gaming in Colorado limited to three towns offering the service and only three games available with a small maximum bet. The Division of Gaming and the Gaming Commission have many responsibilities to keep the limited operators in check.

Its unlikely Colorado will expand its laws in the near future to include additional casino operators and games. The stringent laws have been successful since implementation in 1989. As a result, these regulations have kept order and minimized criminal activity.

When online casinos first hit the market, there were no regulations. Players could place wagers at sports betting sites or play poker at an online casino. Since that time the laws relating to internet gambling have become much more stringent. So much that many international casinos have chosen not to allow U.S. gamers due to the complications.

Where are these Casinos?

Most online gaming sites are located outside of the U.S. This means that the owners avoid any type of legal prosecution from the U.S. Government. Ironically there are several states that allow land-based casino properties within their boundaries, but stringently oppose internet gaming. For the most part many of these international casinos allowing U.S. players are based out of the Caribbean, Costa Rica and Europe. These areas allow regulate all types of gambling.

Why is there a Strong Opposition?

Internet gambling makes it difficult to track the flow of money. Therefore the Government would have a tough time collecting taxes. Neteller is an online bank that used to be the primary method of monetary exchange between the players and the casino. The players used to be able to acquire a Neteller debit card which would allow them to withdraw money directly from their Neteller account, completely bypassing U.S. banks and hiding money. This operation was eventually shut down.

The Government also mentions the point of allowing games of chance to be played by anyone with a computer, including children. Although online gaming sites cost significantly less to create than a land-based operation, they also employ significantly less workers, potentially resulting in a loss of the workforce.

The Catch-22

U.S. law dictates that owning an online casino without a license is illegal. In order to get a license you must apply through a state agency. Unfortunately there are no states granting online gaming licenses. The consequence of being caught gambling online also vary between states.

International Issues

Since internet gambling is such a huge money-maker, the Government of Antigua and Barbuda complained to the World Trade Organization regarding U.S. action to forbid online casinos. Since a good portion of their market is in the U.S. they were losing money. Initially they won the case, but it was later partially reversed.

Although land-based casinos are legal in certain areas of the United States, online are not. Regulations continue to become more rigorous as time goes on. Although there are still millions of Americans that continue to place bets and engage in games of chance online, the Government is watching and will eventually crack down.

Although gambling is legal in some form in most places across the United States, it’s also heavily regulated. This is to protect the player from criminal’s actions and questionable behavior. This is justified since the gambling industry boasts a long history of criminal involvement. Since there are always large amounts of cash in an uncontrolled environment, it’s a haven for illegal activity.

There are two specific methods of effectively enforcing gaming regulations. These include:

• Separate gambling licensing from politics
• Tighten controls on all parties

The State of Washington

Washington is an interesting state with regards to gaming regulatory bodies. The Washington Gaming Commission supervises all gaming functions within the state. The Commission is comprised of nine board members. Five of the members are appointed by the Governor and serve in their respective seat for six year terms.

The Commission is also available to the state senate. Additionally there are four ex-officio board members, two from the house and two from the senate. The Washington Gaming commission is one of the largest in the United States with 135 employees. Even by California gaming standards that’s a fairly large group, covering all regions.

Card Rooms

Washington is an interesting state for gaming law because it regulates card rooms. In Washington, a card room can only be a supplementary business to help support a main business like a bar or restaurant.

Unfortunately for the owner, the profitability is limited by the state. Although this was recently raised, the card room could only charge $3 per half hour per seat as the take for the house. The card room operations are not taxed at the state level. Instead many localities apply taxes.

Other Gambling Operations

The Gaming Commission is also responsible for other gambling operations like sports pools, amusement games, pull-tabs and charitable gaming. Also included are the numerous tribal casinos within the state of Washington. There are many, ongoing negotiations with the Native American groups regarding legislation.

Washington State boasts a large, well-run and regulated gaming system. With the Washington Gaming Commission overseeing most of the operations, they protect the consumer from cheating and manage to keep illegal gaming activities to a minimum. As time passes, stricter laws may be enforced for the good of the customer from cheating and illegal activities. Washington is one of only a few states taking the lead toward gambling regulation.

The New York State Games of Chance Law has found that games of chance are exploited by professional gamblers, commercial interests and promoters. Consequently, the licensing and regulation of these types of games are regulated, controlled and monitored closely. Also, the laws that control games of chance must be strictly enforced to discourage the commercialization of all forms of gambling.

Specific Locations

This law however does grant every area in the state the power to authorize games of chance to specific organizations within the limits of the location such as found on a Native American reservation. In order for the town to adopt the authorization, the board of trustees of the village must support a resolution that issues the licenses for such games.

The Board of Trustees

The board of trustees has specific powers once the authority is granted. First, they have the ability to supervise all games of chance licensing and to change the rules for licensure. Next, they are able to conduct an investigation of the licensees for violations of the games of chance licensing law. Also, they can review all determinations of the department issuing gaming licenses. This includes revoke licenses that do not meet standards.

Furthermore, the board of trustees has the right to hear all appeals of license revocation or suspension. Additionally, the board has the power to carry out an ongoing study of the current games of chance law. The supervision of the distribution of money derived from these games by organizations not licensed falls within their jurisdiction.

Identification numbers to authorized applicants will be issued by the board; assuming the organization satisfies specific requirements. Finally, the board can approve and establish equipment for the games of chance. This ensures that the distribution of this type of equipment only goes to authorized organizations.

Shipments of Gaming Equipment into New York State

This law also covers the shipment of gaming equipment, with the exception of slot machines and other coin operated equipment. It requires registration, recording and proper labeling which is the responsibility of both the manufacturer and the gaming organization. Assuming these rules are followed, gaming equipment can be shipped into the state of New York.

The Games of Chance Law does not restrict games of chance being played within New York. Rather, it simply regulates every aspect of it to ensure it’s not exploited. By following the various regulations this law enforces, many Native American tribes have been able to greatly profit on games of chance.

The Wire Act was enacted by Congress in 1961 to help thwart racketeering. The initial purpose of the act was to help states enforce their individual laws on gambling. It was also to help deter and suppress organized gambling rings. This attacked those involved with betting that use some type of wire communication to transfer bets or wagers or information dealing with gambling.

This means that gambling or betting, the transfer of money or credits or information cannot be conducted over the phone. The consequence of these actions is no more than two years in prison and/or a fine.

The Wire Act works in conjunction with numerous other federal bookmaking laws including:

• The Travel Act
• The Interstate Transportation of Wagering Paraphernalia Act
• The Illegal Gambling Business Act

The Travel Act makes interstate traveling to aid any type of racketeering or gambling illegal. The Interstate Transportation of Wagering Paraphernalia Act makes it illegal to move around any equipment related to placing wagers or any other type of gambling. Finally the Illegal Gambling Business Act makes it illegal to run of finance any type of gambling operation.

In order for the Government to have a case against an individual or group, there are a few points that must be established. For instance, the person in question must be engaged in the business of betting. Also, the individual must have transmitted within interstate or foreign commerce any wagers, information that leads to the placing of wagers or correspondence that gives the beneficiary money or credits based on those wagers.

Furthermore, the individual must have used some type of wire communication or wire communication facility. Finally, they must have knowingly used wire communication to connect with another party.

This regulation was initially aimed at deterring and shutting down organized gambling halls. These were usually run by some type of crime syndicate. Therefore, the casual, social bettor does not fall under the jurisdiction of this act. Under further scrutiny, it’s also been mentioned that casual bettors who wager large sums of money but who show sophistication are also immune from the penalties of this regulation.

The Wire Act is certainly still used today and is a major reason as to why online casinos cannot be created within the borders of the United States. It is also the reason many well-known online casinos stopped accepting United States customers. This Act has been a major setback for land and internet casinos. These laws were created to protect the citizens of the United States and make for a better country.