The issue concerning online gambling legality is quite unclear on its application in the U.S while European countries have passed legislations that are meant to regulate online gambling activities. There have been major differences on how these two countries legalize online gambling with various implications on its States.
Online gambling is currently not prohibited in Europe. The European Court of Justice relayed the legality of online gambling to its State member's competency. European countries have the freedom to decide whether to legalize online gambling within their jurisdiction or not.
There was great divergence on the response of European States regarding online gambling. But majority of them choose not to prohibit online gambling but to regulate it instead. Because of this most online casinos grow within European countries such as Germany, Austria, Ireland and France. Through licensing, European countries are able to exert control over online casino operations. The legislation imposing the need to apply for an online gambling site licensing enable the European government to subject an online gambling company with penalty on any violations concerning specific rules that applies to online gambling operation.
Because of the Licensing Act, the legislation of controlling online gambling activities is strengthened and it effectively allows the European government to confront issues concerning money laundering and fraud. The U.S. however does not provide a clear legislation against online gambling as in Europe.
Majority of online gamblers are composed of American population. The American government passed the Federal Wire Act of 1961 which prohibits American citizens to participate in any online wagering or gambling activities using phone lines. This constitutes online gambling due to its architecture of using phone lines to operate an online business. Because of this, many online gambling companies close operations in the U.S. and many Americans at first shun themselves from participating in any online wagering but such effect is only short lived.
The growth of online gambling companies from other countries where their operations are considered legal, Americans began to participate from off shore online casinos. The U.S. legislation against online gambling extended the coverage of their campaign against online gambling through prohibition of the usage of credit cards by its citizens. But other third party international intermediaries continue to serve Americans providing them another payment option to finance their online gambling activities and more are now surfacing to cater to the huge American population participating with online gambling.
Due to lack of regulation of the anti-online gambling law in the U.S., not a single American citizen were imprisoned and fined for such activities.