Bitcoin Gambling Legal

A question I get asked a lot is whether Bitcoin gambling is legal, especially in the US. So after 14 years in the online gambling industry and going through the UIGEA (Unlawful Internet Gambling Enforcement Act) of 2006, here is the answer as best as I understand it today.

Like with so many legal questions the answer comes down to the specific language chosen by the people that wrote the law in question. So let’s start by looking at what the UIGEA actually says. The full summary of the law published by the Federal Government can be read here.

It’s also important to mention that this Act is a Federal law which means it applies to the entire US. There are other laws that have been passed by individual states which may be slightly different for residents of that state.

Online Gambling Legality

The Act actually prohibits the act of accepting money for internet gambling not the physical act of gambling online. Here is the text from the Federal website:

The Act 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

This distinction is an important one that is not generally understood by people. This means that it is illegal for businesses to take money for online gambling but NOT illegal for US residents to gamble online.

One of the reasons that most people do not know this difference is that it was not in the US government’s interest to make this clear. Rather scare everyone about the “big bad internet gambling” and have less enforcement issues. So as a US resident you are actually allowed to gamble online according to this Act but the site can not accept your money. BTW the act included casino, betting, games of chance and poker.

It is telling to note that even though businesses like Full Tilt were prosecuted for contravening this Act no individual has EVER been prosecuted in the US for actually gambling online. It’s also interesting that when these companies were prosecuted it was for money laundering and not for UIGEA.

But What About the Wire Act?

There is another act called the Interstate Wire Act of 1961 that prohibits the transfer of money across state lines for betting purposes. Many people think that this act stops individuals from gambling but the US Department of Justice clearly stated that this Act ONLY applies to sports betting.