The Federal Wire Act and its effect on ecommerce

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Find out how The Federal Wire Act affects some online businesses

The U.S Federal Wire Act enacted into law in 1961, prohibits operations of some betting businesses in the State. It states that any activities involving betting, wagers, sporting events, and sporting contests should be facilitated using wire communications. This also includes events or occasions where anyone is to receive credit or money from wagers and bets. The U.S enacted the Federal Wire Act to protect its possessions from unauthorized activities in gambling.

How the Federal Wire Act has affected ecommerce

The Federal Wire Act was meant to guard gamblers from unscrupulous casino operators and it has greatly affected the operators of gambling houses, and other gaming sites. The operators are liable for prosecution if caught operating online gambling houses or casinos in some States.

The difference in the amount of capital required to build an online casino, compared to the amount required to build a land-based casino, is huge. Building a land-based casino requires an operator to use a lot of money. This could go up to $400 million while building an online casino would cost the same operator a much less figure of around $2.0 million.

It is easier for casino operators to manage online gambling employees than it is to manage a large number of employees in land-based casinos. Fewer employees mean fewer costs in overheads and better services to the clients because supervision is easier.

Ecommerce generates a lot of capital for the State through taxes. State governments that have refused to regulate online poker are cash strapped as compared to those that have legalized it.

Many gamblers have exposed themselves to enormous risks and losses by using offshore casinos and other betting houses not regulated by the government. By regulating the online gambling act, the State will not only save very many innocent citizens from losing their hard earned cash, but it will be regulating more cash for the government coffers. This act will benefit the State, the gambling houses operators, and also protect the gamblers.

Online casino gambling saves a lot of time and money for gamblers. They do not have to visit land casinos to make their bets or to play poker. They can play online poker from the comfort of their homes. Some of the best US casinos can be found here.

The same act applies to online sports gambling. The act disallows anyone to take sports bets via the phone or the internet. This is also a big blow to the economy of the States because most people believe they can carry out sports bets online anywhere else but in the States.

Many sports online betting giants like BetOnSports and Sportingbet have lost so many of their online clients because of these restrictions.

Some States have legalized online betting. For those that have not, it becomes very cumbersome for gamblers because they have to seek legal redress before they carry out any online sports betting. This is both time consuming and costly. Those that do not have the time or the money to seek legal advice will opt to bet with online betting firms not regulated by the State. In case of anything, they cannot sue.

The Federal Wire Act law while meant to protect gamblers, it has also brought with it some negative effects to the economy.

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