In a sign that the United States may be warming up to the idea of a multibillion-dollar online gambling industry, the state of New Jersey has recently legalized online gambling. Legislation passed in 1961 by the US government prohibits gambling of any type. However, individual states can legalize the pass time, if it does not cross state borders.
New Jersey is testing the state based sites to see if it can restrict the players to only people within the state. Delaware and Nevada have been the only two of the country's 50 states that allow online gambling up until now; albeit, with heavy restrictions in place.
To lock out gamblers from other state, geolocation technology is typically used. The technology is designed to check where a person is logging on from and blocks the user if he/she is not from the state. Initial results show the technology is too restrictive, according to people involved in the test. One user said he had drove 30 miles further into the state to log on, from his residence, but was still getting locked out. The geolocation system failed to recognize he was within New Jersey.
With 14 websites to offer, the state is expected to launch online gambling in full next week, despite these setbacks. Mark Jordan, a director at accountancy firm PricewaterhouseCoopers hopes, "A federal law, should it come in the future, [that] would allow for a customer in California to play poker against a citizen in New Jersey." However, the 1961 Wire Act prohibits it.
"At the moment you cannot do that. That's prohibited. What a lot of the operators are hoping is that as the states prove this can be done, and that it's safe, that the federal laws will change to allow state-to-state gaming," added Jordan.
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