In decades past, gambling used to be a crime almost everywhere other than Las Vegas, Nevada and Atlantic City, New Jersey. Today, more and more states have legalized various types of gambling, ranging from Indian casinos to poker rooms and horse racing tracks. While some states have legalized certain types of gambling, other types of gambling are still illegal. All states have laws that prohibit at least some type of gambling.

Gambling is sometimes referred to as “gaming.” Depending on the language of state laws, gambling and gaming can mean different things or the two terms can be used synonymously. “Gaming” typically refers to playing games for wagers, such as craps, card games, slot machines, and roulette. “Gambling” may refer to these same types of games, but it also includes other types of activity such as sports wagers.

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Gambling is defined in numerous ways, but requires betting or wagering on an outcome that is at least partially based on chance, and done so in order to win something. Illegal gambling is any type of gambling that is specifically prohibited by state law.

Gambling Involves a Bet

While most instances of gambling occur when someone bets money, courts have ruled that gambling can occur whenever a bet is made using anything of value. The item of value is sometimes known as “consideration,” and can encompass anything that has any worth. The amount of the bet doesn't matter, and as long as the property that's at stake in the game is worth some value, the game is gambling.

'Games of Chance'

State gambling laws outlaw games, bets, or wagers that are at least partially dependent on some element of chance. If a game or competition that gives prizes to winners is based on skill, such as a car race or a shooting competition, it is not considered gambling. (However, other laws or restrictions may apply in order to make such competitions legal.)

What differentiates a game of skill from a game of chance is usually determined by which of the two elements has the greatest impact on the outcome. If chance is the biggest factor, the game is one of chance, and making bets or wagers on such games is gambling. Courts have ruled that in games that involve both skill and chance, and where a small group of skilled experts routinely win, this does not necessarily make the game one of skill. In determining what defines a game of skill or chance, courts often judge the game on the average player. If the average player's chances are dominated by chance, the law considers it a game of chance.

A Chance of Winning

If you don't have any chance of winning something of value, you're not gambling. Gambling requires that there is a chance you might win something for your bet, whether it's money, property, or even more chances to play. Further, courts have ruled that you personally don't need to have placed any wager to be convicted of gambling. As long as a group of people have a chance to win something and at least some of them have made a wager, you can be convicted of gambling if you are part of the group and stand a chance at winning.

Prohibition Against Making a Profit

Those who win at gambling have obviously made some money. But aside from the players, what about the businesses who run or operate the gambling game or establishment?

Some state laws specifically allow for 'social gambling' while prohibiting gambling as a business. Business gambling occurs when a person or organization operates a gambling hall that collects fees or takes a portion of the amount the players bet. For example, a person who holds a 'casino night' party and charges an entry fee is engaged in an illegal activity in a state that prohibits business gambling or gambling for profit. So-called “social gambling,” where the players are all equals an no one is collecting fees or making a profit apart from the outcome of the game -- such as in a home poker game -- is often not considered illegal. However, even social gaming is illegal in some states.

Penalties

While all states criminalize gambling to some extent, they also have vastly different penalties associated with gambling crimes. The type of penalty someone faces after being convicted of illegal gambling largely depends upon the state and the circumstances of case, though sentences typically involve many of the same types of penalties. Gambling can be classified as either a misdemeanor offense or a felony, depending on the situation and state law.

Jail or Prison

Anyone convicted of misdemeanor gambling faces up to a year in a county or local jail, though state laws differ widely. Some states impose small maximum jail sentences for misdemeanor gambling, such as 20 days in jail. Felony convictions, on the other hand, can bring a year or more in prison, and sometimes as much as 10 years, especially where organized, professional gambling is present.

Fines

Misdemeanor fines for gambling are quite common, and range from a few hundred dollars up to $1,000 or more. Felony gambling fines can be significant, sometimes as much as $20,000 or more. Fines can be separate from, or in addition to, jail or prison sentences.

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Probation

Instead of, or in addition to jail time and fines, courts can impose probation sentences for gambling convictions. These probation periods usually last 12 months or more. When a court orders probation it tells you to do (or not do) certain things. For example, the court may order you to stop gambling or to participate in a gambling addiction treatment program. You'll also probably have to report to a probation officer and stay out of trouble with the law. If you don't live up to the probation conditions, the court can revoke your probation and send you to serve the original jail or prison sentence.

Speak to a Lawyer

Illegal gambling charges can impose significant penalties and can have a serious impact on your life, even if you aren't convicted. Anyone charged with a gambling crime needs to speak to a local criminal defense lawyer at the first opportunity. A good defense attorney will know the gambling laws in your state and have experience with the local prosecutors, judges, and court system. It's always in your best interests to speak to a local criminal defense attorney anytime you are charged with a gambling crime.

OnMay 14, 2018, the United States Supreme Court held in Murphy v. NCAA that certain provisions of the federal Professionaland Amateur Sports Protection Act of 1992 (PASPA) violated theanti-commandeering rule of the Constitution and that these provisions could notbe severed from the act—meaning PASPA is no more. The 6-3 opinion, authored byJustice Alito, explained that PASPA’s language did not make sports betting afederal crime; rather, it forbade the several states from authorizing sportsbetting or an individual relying on state authorization to operate a sportsbetting operation.

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WithoutPASPA, individual states are now free to authorize sports betting at theirleisure, and some have already taken advantage of its defeat: Delaware,Mississippi, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island, andWest Virginia have all legalized sports betting to some extent. New Jersey inparticular was well-prepared to roll out a new sports betting regime—itscasinos generated $63 million from sports betting in just the first threemonths of 2019, amounting to $7.7 million in taxes for the state.

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OnMarch 14, 2019, Ohio State Senators John Eklund (R-Chardon) and Sean O’Brien(D-Bazetta) introduced Senate Bill 111 to bring legal sports betting to Ohio.This proposal would authorize the Ohio Casino Control Commission to license the11 casinos and racinos across the state to begin operating sports betting, bothon-site and through branded websites or web-based applications. S.B. 111 would alsolevy a tax on total sports wager receipts collected by casino operators at arate of 6.25%, in addition to enacting a $100,000 fee for operators to becomelicensed to operate sports betting facilities. Further, casino operators wouldhave to pay an administrative fee of $100,000 for every five years of operationafter their initial licensure.

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Justthis month, the Ohio House of Representatives saw the introduction of its owncompeting proposal to legalize sports betting in the state. In contrast to S.B.111, House Bill 194 would authorize the Ohio State Lottery Commission toregulate and license sports betting operators under the Commission’s broadauthority to establish lotteries. In addition to establishing sports bettingoperators’ licenses for Ohio’s casinos and racinos, H.B. 194 would also allow fraternaland veterans’ organizations across the state to place single sports bettingterminals in their organizational facilities for their members’ use. Theproposal would levy a 10% tax on sports wager receipts and impose a $100,000 licensurefee on casinos/racinos and a $1,000 licensure fee on fraternal and veterans’ organizations.Casinos and racinos would also be subject to an annual $100,000 license renewalfee.

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Thebottom line is that sports betting in Ohio—much like the medical marijuanaprogram—is here to stay. Moreover, state-sanctioned sports betting will inevitablycreate a new set of legal challenges and considerations, such as whatregulations the State will promulgate to govern licensure, and how potentiallicensees can position themselves to quickly navigate the application processto take advantage of this rapidly expanding market.

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At Crabbe, Brown & James, our attorneys have significant experience navigating administrative agencies’ complex rules and regulations surrounding license applications, renewals, and appeals in Ohio and throughout the country. Our clients include applicants to the Ohio Medical Marijuana Control Program as well as gaming clients with licenses and operations in dozens of states. Our legal team at Crabbe, Brown & James is uniquely positioned to advise and assist clients in this developing area of commerce.