Any analysis of the legality of wagering must include an analysis of the federal gaming laws (largely prohibitions), including, but not limited to, the Wire Act, the Travel Act, and the Illegal Gambling Business Act, all largely adopted in the 1960s and early 1970s to combat illegal bookmaking and organized crime. Importantly, a violation of federal anti-gambling law typically must be predicated on an underlying violation of state law. The 10th Amendment of the US Constitution reserves to the states such “police power” to regulate matters of public health, safety, morals, and general welfare (subject to certain federal law and other constitutional rights). Wagering falls under this police power. As such, a complete analysis of the legality of any wagering business must also include a 50-state survey of applicable state laws. Below is a discussion of various developments over the years that when taken together, make up the framework of any analysis of legality and risk of payment processing for wagering providers.

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