Category Archives: NETeller

Online Gambling in the US — Is it Legal?

I have done a fair amount of research and thinking about this issue, and wanted to share my findings and thoughts on the topic.

1) Prior to the passing of the Unlawful Internet Gambling Enforcement Act of 2006, eleven states had laws on the books that specifically ban all forms of online gambling. These states are: IL, IN, LA, MI, NJ, NV, NY, OR, SD, WA, WI. Online gambling continues to be considered illegal in these states. As for the other 39 states, the question of whether online gambling is illegal continues to be unanswered.

It bears noting that I have seen no reports of any player in the United States being prosecuted under any anti-online gambling state laws.

2) The Act did nothing to alter, curtail, or extend state laws regarding online gambling. Thus, it did not make online gambling illegal in all states.

3) The Act does place restrictions on the financial transactions that occur in connection with online gambling; it restricts electronic fund transfers and the use of credit cards in connection with such wagering. This means that players will no longer be able to make wagers, or collect winnings using electronic fund transfers, credit or debit cards, or some other online payment systems — once the US Treasury Department publishes its regulations for enforcing the Act in the summer of 2007. As a law passed by Congress, this law will apply to all states.

In response to the Act, online gambling sites have done one of three things with respect to US-based real-money players:
1) Continue to accept US-based real-money players from all states
2) Accept US-based real-money players from states other than the states in which online gambling is specifically outlawed (meaning no players from the states listed above)
3) Closed their site to all US-based real-money players

Also in response to the Act, Firepay (an online payment system) stopped handling gambling-related transactions. NETeller (another online payment system) continues to handle gambling-related transactions, and has stated that they are monitoring the situation. Blog update: NETeller has also exited the US market.

So what has the Act really done? In and of itself, it certainly did not make online gambling illegal; the state laws on this issue continue to apply as they did before the Act was passed. It has reduced the number of sites where US players can gamble, and it forced US players to find creative ways of funding their online gambling accounts. It certainly raised awareness in the United States (and the world for that matter) about online gambling, but my sense is that it still has not yet had a major impact on behavior. Depending on the enforcement parameters that the US Treasury Department comes up with next year, the Act may have little long-term impact on online gambling in the United States.


Gambling Do’s and Don’ts

Here are some do’s and don’ts to keep in mind when you’re gambling. Do:

  • Set a stop/loss strategy for your gambling session, and stick to it. A stop/loss strategy is where you set limits on how much you are willing to lose AND how much you are willing to win. For example, if you start with a bankroll of 200, one stop/loss strategy would be to (a) stop if you lose 200, (b) pocket 200 when you reach 400, and then continue to play with the remaining 200 until you (b1) lose it or (b2) win 200 more, at which point you would stop.
  • Know the rules of the games that you’re playing.
  • Tip the dealers and drink staff even if you are losing. You’re tipping for their service, not for your run of good or bad luck.


  • Drink to excess when gambling. Alcohol suppresses inhibitions and increases the chance that you will wager more than you’d planned.
  • Bet more than you can afford to lose. If you are betting money that you need for food, shelter, and clothing, then you’ll find yourself in a tough spot very quickly. (If anyone reading this finds themselves in this situation, please seek help at GA.)
  • Give unsolicited advice to other gamblers. It’s rude. For example, when playing at a blackjack table, don’t tell others how to play their hand (unless they ask you, of course).

Online gambling has its own unique do’s and don’ts in addition to the ones listed above. Do:


  • Expect to be paid right away. When you withdraw, it usually takes several business days for the money to appear back in the account that you used to make the deposit.
  • Provide false information when registering at an online gambling site. Sites can use this fact to void your winnings!
  • Go anywhere other than The Online Casino Gambling Directory to find online gambling sites. The Online Casino Gambling Directory is listed as one of few Reputable Gaming Portals by eCOGRA, and is really the only site you need to find gambling sites and related information. (OK. That was a shameless plug — but it’s true!)

The clock is ticking for NETeller

NETeller recently confirmed that they are staying in the US market, at least until the US implements the provisions of the UIGEA in July 2007. Realistically, there will need to be a major shift in the United States Congress to allow NETeller to continue operating under its current business model in the United States. By major shift, I mean something on the order of a repeal of the UIGEA, which is unlikely.

One possible scenario that I can see is that the regulations that are implemented will contain a loophole through which NETeller will attempt to squeeze through. History suggests that most regulations of this nature do contain loopholes that are exploited by interested parties, and there is little reason to think that the UIGEA regulations will be an exception. Once NETeller attempts to squeeze through the loophole, litigation may follow (although I can’t imagine what jurisdiction would hear the case).

We’ll all have to wait and see. In the meantime, game on!

By the way, if you are a US player and recently go kicked out of your casino or poker room (like I did), I got your back. Here is a list of online casino and online poker sites that continue to accept US-based real-money players. Fight the power.