<\/p>\n
Online gambling has been a staple of internet gaming for decades. That, or a thorn in the side of regulators unequipped to hold operators to the standards of ever-changing legal parameters. A $52-billion industry (in 2021<\/a>) that seemingly exists in the ether, Web3 communities are getting excited about the prospect of high-stakes virtual games.<\/p>\n But times have changed significantly since the poker boom<\/a> of the early 2000s. While online gambling has been put through the wringer of the legal system, it has emerged on the other side as a robust, if not relatively niche, ecosystem. Yet, the days of internet casinos are changing still, and now, virtual gambling is happening on the blockchain and in the metaverse.<\/p>\n From virtual poker to skill game contests, the line between viability and legality for Web3 gambling seems quite thin. Considering the distrust created in the NFT space via scams and rug pulls<\/a>, users are understandably apprehensive about engaging with any metaverse betting platforms. But is the skepticism truly warranted? Is there really so much at stake for those wanting to engage in metaverse gambling?<\/p>\n Before delving into the forms of NFT betting in the metaverse, it\u2019s important to understand the legal status of online gambling in the United States. Without going too deep into the vast and odd history of the industry, in 2022, gambling regulation is both quite strict and varies state by state.<\/p>\n For the most part, the regulation of online gambling harkens back to the Federal Wire Act of 1961<\/a>. Originally, this act went into effect to prohibit gambling that takes place across state lines. In other words, placing a bet in your state of origin is fine, but placing a bet in an adjacent state in which you don\u2019t reside is considered illegal. This act mostly came about as a way to suppress local criminal activities that supported national criminal organizations, but, with the advent of the internet, it\u2019s had palpable effects on online gamblers across the country.<\/p>\n In turn, the Federal Wire Act also affects Web3. Because while in 2011, the Obama administration\u2019s Department of Justice (DOJ) concluded that the Wire Act may only apply to sports betting, years later, in 2018, the Trump administration\u2019s DOJ reversed the previous interpretation<\/a>, saying that the law extends to all forms of cross-state gaming. This effectively threatened the legality of online lotteries, poker, etc, and left it to the discretion of the individual states to regulate.<\/p>\n But the Wire Act isn\u2019t the only force restricting online gambling, since the Unlawful Internet Gambling Enforcement Act<\/a> of 2006 (UIGEA) made it illegal to operate an online gambling website from U.S. soil. Yet, since operators of most online gambling sites moved overseas, their U.S-based users retained the ability to continue legally placing bets on said platforms from home, so the act gave leeway to users. While this offered more accessibility to online gamblers, the 2018 interpretation of the Wire Act restricted online gambling as a whole, meaning that even offshore casinos were off-limits to those in states with harsh regulations.<\/p>\nThe legality of online gambling<\/h2>\n