Gambling Laws in the USA Explained – NJ + South Dakota State Legislation Examples

Gambling laws in the US may seem complex, but once you break them down, they actually make perfect sense. It all begins with Federal Law passed through Congress where there is a ban on American financial institutions allowing players to fund any type of online gambling accounts.

If caught, the fine is exorbitant to say the least, so naturally the financial arena in the US obliged by banning all online casino transactions. Even crypto wallets based in the US are susceptible to fines if caught allowing US subscribers to fund an overseas online casino account. However, state level laws can override Federal law using land-based casino licenses where taxes on gambling revenue are still applicable.

Explanation of how US online casinos can operate under land-based casino licensing

To explain further, New Jersey is perhaps one of the best examples to use. Land-based casinos have licences to operate in Atlantic City—the only place where casinos are legal in the state under the New Jersey Casino Control Commission (NJCCC).

Next, under the Division of Gaming Enforcement’s Licensing Forms (NJDGE), online casino brands can apply for a partnership under one of the land-based casinos. For example, you can check out this virgin-casino review, which is a US online casino available in New Jersey under the Tropicana Atlantic City land-based casino licence. As long as Virgin Casino operates its online gambling servers on the premises of Atlantic City’s Tropicana land-based casino, players that connect with these servers are effectively betting inside the casino.

Advertisement

As a result, betting using US dollars is legal, and financial institutions can legally offer deposit and withdrawal methods with these casinos. Adding to this, if you search for legal/licensed online casinos in New Jersey, you will also see the Tropicana online casino is another option.

Both Virgin and Tropicana online casinos operate under the same Tropicana land-based casino license and, as such, revenue earned via the online casino is clubbed together and reported to the Inland Revenue for tax purposes.

Explanation of states that use different frameworks for multiple gambling verticals (South Dakota)

Both online sports betting and online casinos can operate in the Garden State under the laws laid out by the NJDGE. However, in some states, online gambling is illegal, while making deposits to online and/or mobile sports betting are legal. This may seem odd at first, but in effect, both gambling verticals operate under different laws in some states. Then there are separate land-based sports betting, horse racing, and casino laws that do not coincide with online gambling laws. In South Dakota, there are different laws for all verticals.

South Dakota Gambling Laws:

• Online Horse Racing—legal framework in place (Permitted)
• Land-based Horse Racing—legal framework in place (Permitted)
• Dog Racing—no legal framework (Not permitted)
• Online Casinos—no legal framework (Not permitted)
• Land-based Casinos—legal framework in place (Permitted for certain games)
• Poker—legal framework in place (Permitted)
• Online Sports Betting—no legal framework (Not permitted)
• Land-based Sport Betting—no legal framework (Not permitted)
• Fantasy Sports Betting—no legal framework (Not permitted although some confusion)
• Lottery—legal framework in place (Permitted)

As you can see, in South Dakota, the laws allow online and land-based horse racing bets. Yet, this does not fall under sports betting, which refers to football, soccer, basketball, and so on. Meanwhile, no forms of online casino gambling have a legal framework in place. Lottery is permitted thanks to a 1986 constitutional amendment approved by voters.

Land Based Casino Games Permitted in South Dakota

In 1989, land-based ‘Video Keno’, ‘Bingo’, and ‘Video Poker’ came to South Dakota as the first casino games to legally operate in the state. Shortly after, casinos in Deadwood would come to town via a vote that made casinos legal here to save the city’s economy.

Advertisement

Land-based casino games now legal in South Dakota’s Deadwood:

• Video Slots
• Blackjack
• Poker
• Craps/Roulette
• Video Keno
• Bingo
• Video Poker

Casinos must abide by maximum bet limits on each game and the number of tables, slots, or other gaming machines allowed on the premises. With the laws regularly changing, the city is now a popular casino destination with over 40 land-based establishments operating today.

Why is it important to understand the different state laws?

If you are looking to gamble legally in the US whether online, retail, or at a land-based casino establishment, through this guide, you will now be aware that some states are straightforward with their laws, while others have various laws across multiple verticals.

New Jersey, Michigan, Pennsylvania, Delaware, West Virginia, and Connecticut have the most straightforward laws for pretty much all forms of gambling. Nevada is fairly straightforward legalising all forms of gambling online and land-based with the exception of online casinos. Then there are states you will need to do a little more research on, such as South Dakota, where gambling laws are applied to a variety of different verticals. Now you know what to look out for, you can travel across the country and know what to look for before deciding whether you can legally gamble.