These gambling sites are also known and are purportedly practicing "illegal transactions," since online gambling in the U.S. is prohibited. The lack of confidence in investing on online gambling and insecurity of the financial channels and transactions of these sites stem from the fact that "[t]here is also a question mark over whether U.S. banks and financial services businesses which process online gambling transactions are in breach of law" (Begum, 2005:13).
However, the question of the legality of these online gambling sites are being put into scrutiny. U.S. legislation has decided to deregulate online gambling through the 1961 Wire Act, with an updated version through the proposed bill Unlawful Internet Gambling Enforcement Act. The Wire Act is perhaps the only legislation that exists that is relevant to online gambling activity, wherein the law "prohibits the transfer of betting information across state lines using wire communication, such as the telephone" (Chesler: 2006:24). This legislation was, of course, conceptualized at a period wherein online gambling, or the Internet for that matter, has not yet been developed and prevalently used by American society. On the new proposed bill, the Unlawful Internet Gambling Enforcement Act, online gambling owners and users are prohibited from engaging in online financial transactions that requires the use of credit cards and fund transfers (25). These measures are set in order to protect the user mainly, and the online gambling sites as investments, secondarily.
By putting regulation on how transactions in online gambling sites are conducted, the American government is ensuring itself that the user refrains from placing cash bets that is not within his/her capacity, and simply, to curtail addiction that may develop as a result of the "easy money" generated from gambling. On the part of the investors and bankers, such legislation will ensure them that all financial transactions conducted online are not only valid and credible, but are also legal in the sense that cash flows do not come from a questionable source or funding.
Eadington (2004), in his assessment of U.S. online gambling, posited that despite the increased pressure to deregulate online gambling sites...
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