The online betting industry has grown remarkably over the past few years, and it can be argued that it still has not quite reached its full potential. The online casino gaming industry, likewise, has grown exponentially over the last few years, despite significant legal uncertainties, particularly in the United States.

There have been numerous articles published slamming the Internet gaming laws in the United States as unclear, or in a grey area. Some respected people have claimed that online casinos and betting is legal, despite the letter of the United States law pointing to quite the contrary.

The main problem is the US Wire Act. Gambling, which includes sport betting, is seen by the courts as a hazard to the public and therefore has no constitutionally protected right. Furthermore, gambling is seen as a vice activity that can legally be banned altogether. The Wire Act means that it is a federal felony, punishable by a maximum sentence of two years imprisonment, if an individual or company accepts any wager over a device that uses telephone wires, or provides information that assists anyone in doing so. This itself raises many questions; for example, are those who are involved in Web site affiliate programs that include online betting sites providing information that assists in making a bet over telephone wires? What about the increasing popularity of wireless technology, which inevitably involves telephone wires at some stage? Any American citizen who plans to assist an offshore company in the development of an online gaming facility can be deemed a conspirator, and held liable under the Wire Act.

Now think Las Vegas, gambling capital of the world. It bears such a massive contrast with the Wire Act that one would think it unimaginable for the two to co-exist under the one constitution. Thankfully, the laws are more relaxed in most other countries where on track betting and gambling is commonplace. In Britain, for example, Internet betting is considered an equivalent to telephone betting, which has been lawful since off-track betting was legalised in 1961.

Many betting sites have opened up offshore in tax havens in order to avoid the general betting duty, which often has to be fully paid by the bookmaker. An American, Jay Cohen, was one to seize this opportunity and moved to the Caribbean island of Antigua where he founded the World Sports Exchange. After 1600 customers and $5.3 million in funds wired from the United States, Cohen was eventually sentenced to 21 months imprisonment after being found guilty under the Wire Act. He was deemed to have advertised to the United States market; but surely, even with more accurate geographical IP addressing systems coming out, no online betting site is safe from this charge? Filtering out the entire United States could be nigh on impossible at this stage.

The Wire Act is one that will have to be reviewed, clarified and perhaps eased. Betting online has become a worldwide industry, and there will be many prepared to turn a blind eye to the law in order to cash in.