Top-10 ridiculous gambling laws

4 June 2012
Several states have recently made moves to make sports betting legal within their states. The most notable effort is New Jersey’s, which is on a collision course with the U.S. Supreme Court over the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), which makes traditional sports betting (e.g., single-game spread bets) illegal outside of Nevada.

PASPA is a silly law that stands in conflict with nearly every other gambling law in the United States in that the legality of different forms of gambling has always been decided by the states.

But PASPA isn't the only ridiculous gambling law out there. There are plenty of others – enough, in fact, to make a top-10 list.

10. Deputizing Oklahoma railroad employees
It is illegal to run a Three-Card Monte scheme in Oklahoma under state code 21-954, and that's good policy. But the law immediately following it, 21-955, is a head scratcher. It says railroad conductors and brakemen are required to arrest people breaking the Three-Card Monte law, and to "call upon all bystanders or others for assistance, when the same may be necessary, to enable them to make such arrest, and when the offense is committed on any railroad car, coach or train."

9. Kentucky sore loser clause
There are several states that allow losing players to sue winners to recover their losses. Kentucky's law in particular seems to be the most ridiculous. If you lose $5 or more to someone that you gamble with and you pay, you can sue them in the next five years and recover the losses. Even more ridiculous, however, is that if the loser doesn't sue in six months, anyone else can file suit against the winner and can recover three times the amount of the original wager.

8. No betting on elections in South Carolina
Every election year, online sportsbooks put odds on each race. And if you have strong feelings about your favorite candidate, and a friend has strong feelings about another candidate, what's to keep you from putting a friendly wager on the line? Well, in South Carolina, there's Section 16-19-90 of the state code, which forbids betting on elections and mandates a fine of up to $500 and jail time of up to a month for making such wagers.

7. Public gaming law in Bexley, Ohio
It's no surprise that a town where it was reportedly once illegal to have or operate a slot machine in an outhouse makes our list, but it's not because of the now-defunct outhouse law (there's no word on whether it's legal to use them in a bathroom with full plumbing today). Instead, Bexley makes the list because of a ridiculous "public gaming" law that makes it illegal to play any game of chance in a "hotel, restaurant, tavern, store, arena, hall, or other place of public accommodation." The way I read this section, you couldn't bet a friend $10 (let alone a beer) on a football game while watching it at a sports bar. It seems like a bit of an overreach to me.

6. Iowa's $50 limit
Kudos to Iowa for carving out "games between individuals" in section 99B.12 of its law on gambling. It allows people to bet against each other on sports, hold poker home games, and make other wagers against each other. However, in sub-section g, the law says these games are allowed only when "no participant wins or loses more than a total of fifty dollars … during any period of twenty-four consecutive hours." So if you organize a $20 poker tournament with 10 people, the top prize you are legally allowed to award is $70?

5. No deducting losses from state taxes
One of the most important parts of the federal tax code when it comes to gambling is the ability to deduct losing sessions from winning sessions to have an accurate account of your overall winnings for the year. If you win a $10,000 prize in a $100 poker tournament, but entered 49 other $100 events and didn't cash in any of them, your winnings would be $5,000 ($10,000 minus the $5,000 in entry fees). Most states allow you to do this as well, but some only count winnings and don't allow the amateur gamblers to deduct losing sessions. This inflates your tax liability and is not a true account of your winnings throughout the year. Indeed, you could be a loser on the year yet still owe a large tax liability on your "winnings."

According to Brad Polizzano (aka @taxdood), states that do not allow amateur gamblers to deduct losses include: Connecticut, Hawaii, Illinois, Indiana, Massachusetts, Michigan, Ohio (until 2013), West Virginia and Wisconsin.

4. Do a math problem to win a sweepstakes
In Canada, if you win a sweepstakes, you might find that you are required to do a simple math problem in order to claim your prize. According to Wired, "Canadian anti-gambling law makes it illegal to sell chances to win a prize, so promoters always offer a free method of entering each contest, and task every winner with a skill-testing question. By doing the latter, they argue, the game is no longer one merely of chance but a contest requiring some skill."

If you can get around a gambling law by having a winner show they have mastered 2nd-grade math, then you have a ridiculous law.

3. Washington State Internet gambling law
In 2006, Washington State became the first to make Internet gamblers potential felons. From state code RCW 9.6.240: "Whoever knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore, the internet, a telecommunications transmission system, or similar means, or knowingly installs or maintains equipment for the transmission or receipt of gambling information shall be guilty of a class C felony."

It has been six years since this law has passed, and not one Internet gambler has been charged with a crime under this law. Yet thousands of Washington residents continue to make bets on the Internet. Now that's a ridiculous law.

As mentioned in the introduction to this story, the Professional and Amateur Sports Protection Act may well be ruled unconstitutional in the not-too-distant future. The law passed in 1992 thanks in large part to then Senator Bill Bradley's efforts and allowed states just a one-year window to change their sports betting laws. Legislators in New Jersey recently passed a bill that would allow sports betting in the Garden State, charging that the law is unconstitutional as it allows a form of commerce in one state while banning it in others. Personally I'm looking forward to seeing how this plays out in a conservative Supreme Court that has leaned heavily towards giving states more rights.

Was there any doubt that the Unlawful Internet Gambling Enforcement Act would be the number one ridiculous law on this list? The UIGEA forces banks and financial institutions to block transactions to companies that offer gamblers a chance to take part in "illegal Internet gambling" while never defining what is or what isn't legal. Beyond that, it created loopholes for the horse racing industry, thus creating winners and losers in the gambling industry. The UIGEA didn't actually do much to stop people, either, at least not before the Department of Justice cracked down on PokerStars, Full Tilt Poker and Absolute Poker on Black Friday in April of last year.

Aaron Todd

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Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.