Most people today equate gambling with Las Vegas or Native American casinos. Others think of lotteries, sports betting, and occasional wagering on horse races. Most states have some form of legalized gaming, even if it is only the state Powerball lottery. Only Hawaii and Utah have no forms of legalized gaming at all.
Legal case law defines gambling as a prize awarded in a game of chance for a consideration (Trinkle v. California State Lottery, 2003). In other words, if you pay money in hopes of winning something of value, and the outcome is not known in advance, it is gambling.
Gaming laws cover all types of legalized gambling, from high-stakes casino games to sweepstakes and church bingo tournaments, if they meet the legal definition of gambling. State laws and state gaming control boards regulate where gaming operations may take place, zoning regulations for gaming establishments, and the manufacturing of casino equipment. Gaming law attorneys spend most of their time ensuring regulatory compliance for casinos and other gaming businesses.
Twenty-four states allow commercial gambling. Casino gaming involves players betting against the house rather than one another. State gambling laws regulate what games are permitted (including mechanical or video games) and what percentage must be paid out. For instance, the Nevada Gaming Commission requires slot machines to pay out at least 75% of the time. Most machines on the Strip have a 92% payout rate to entice bettors into the casinos.
The National Indian Gaming Commission (NIGA) regulates Native American casinos on tribal lands. The NIGA is an independent regulatory agency formed under the Indian Gaming Regulatory Act (25 U.S.C.§ 2704 et seq.). Tribes may have other regulations for their casinos as they see fit. For instance, some nations prefer that all employees be members of the tribe or live on the reservation.
Some states, such as California, offer cardroom gaming. This is a form of gaming where licensed casinos provide space for gamblers to bet against each other rather than the house. Other cardroom games, such as baccarat, let all players take turns as the dealer, so there is no “house" dealer.
Online gaming has become a huge moneymaker for everyone involved in the gaming industry. Early gaming regulations for video games only discussed video poker and similar stand-alone slot machines. Internet gambling took off in the mid-1990s, primarily because of the lack of any regulatory mechanisms. Today, some estimates place the value of online gambling at over $40 billion worldwide.
Internet gambling encompasses the same types of games seen in casino gambling: poker, lotteries, horse racing, and in-play sports betting. Fantasy sports betting has its own trade industry, the Fantasy Sports & Gaming Association. The FSGA won a lawsuit against the MLBMA in 2008, obtaining the right to use the names and statistics of players in fantasy sports betting.
Online Sports Betting Laws
Online sports betting is an evolving area of law. The U.S. Congress outlawed most state-sponsored sports betting through the 1992 Professional and Amateur Sports Protection Act (PASPA). This law was overturned by a 2018 Supreme Court ruling, Murphy v. National Collegiate Athletic Association. State legislation for legal sports betting — and in particular, online sports betting — soon followed.
As of November 28, 2023, 40 states and the District of Columbia have enacted laws governing online sports betting. These states are Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, and Washington.
In addition to these states, four states (California, Missouri, Texas, and Wyoming) have legalized sports betting but have not yet launched online sports betting markets.
There are other states that limit operating sports betting to tribal casinos. For example, in Wisconsin, only individual tribes can amend their gaming compacts to allow for sports betting at their casinos. While online sports betting is allowed, the betting must occur on tribal property such as reservations or, other lands, such as the Oneida tribe's truck stops.
Be aware that the legal status of online sports betting is constantly evolving. Make sure to check with your state's gambling commission for the most up-to-date information.
Who Needs a Gaming Attorney?
Gaming law is not a specific practice area. Gaming law attorneys work with casino owners and gaming companies with legal issues related to gambling and gaming. For instance, a company opening a business in Atlantic City needs legal advice on how casino zoning will affect their business. Casino operators need a gaming license, as do shopkeepers who have slot machines in their stores.
State gaming commissions regulate the equipment manufacturers who make and assemble slot machines, roulette wheels, and dealer's shoes. Any claims of fraud or cheating will go back to the manufacturer, so gaming lawyers are essential for these companies.
On the flip side, gaming attorneys represent customers and gamblers who have been victims of fraud. Not all casinos run legal games. People who need legal services to fight a casino or online sports franchise need the best lawyer they can find who understands the gaming industry.
Other areas that overlap with gaming might include:
- Business law: Business lawyers can assist with structuring a gaming business to comply with state and federal regulations.
- Real estate law: Zoning regulations are an important part of the gaming industry. Towns and cities are reluctant to have casinos near schools or residential areas. An attorney with years of experience navigating city councils and zoning boards is needed to obtain variances.
- Tax law: Arranging financing for your gambling business won't be easy. Lenders are wary of casinos unless you have a Las Vegas power broker behind you. A good tax attorney or accountant can beef up your financials.
- Intellectual property law: If you're working on a fantasy football league or a pari-mutuel betting app, you should discuss it with an IP attorney. Protect your idea before you post it online and before someone claims you stole it from them.
If your business is related to the gaming industry, or if you believe your legal matter involves a casino or gambling establishment, contact a gaming lawyer in your area.