Usually, a land-based gambling facility is governed by laws in which country the casino is located. But what about cruise ships? Almost every cruise ship has a full casino on board, but since the ship is at sea and constantly moving about, how is this legal, and which laws apply to gambling at sea?
Well, there is a lot of talk about gambling at water, and this conversation has been around for hundreds of years.
Illinois is the perfect example. Gambling in land-based casinos is strictly prohibited. However, gambling laws in Illinois allow betting on horse racing and gambling at a casino on riverboats. So, if it is a boat, it is allowed, and if it is a land-based location, it is prohibited.
Kind of strange. We have a similar story with cruise ships, but only more complicated.
There are different laws that govern gambling at sea just like when different laws apply when playing online blackjack for real money.
Let’s learn more about them before getting into trouble.
Setting Sail: The Basics of Maritime Law
First off, let’s get our bearings. When it comes to the high seas, maritime law, or admiralty law, takes the helm.
This body of law governs everything from shipping and navigation to commerce and even crimes on the water.
But when a cruise ship leaves port and enters international waters, about 24 miles off the coast, the situation becomes more complex. Here, the ship is primarily subject to the laws of the country where it is registered, also known as the flag state.
That’s why some cruise ships don’t open the casino doors until they’ve sailed into international waters. The more we dive into the stranger managing casinos on cruise ships get.
Who Makes the Rules?
Cruise ships often register in countries with lenient maritime laws – a practice known as “flagging out.” Popular flag states include Panama, the Bahamas, and Liberia. These countries have regulations that are generally favorable to the cruise industry, which explains why you might see a Norwegian Cruise Line vessel flying the Bahamian flag.
International Regulations
While the flag state has significant influence, international treaties also play a critical role. The International Maritime Organization (IMO) sets global standards for the safety and security of shipping. For instance, the International Convention for the Safety of Life at Sea (SOLAS) dictates safety standards for ship construction, navigation, and equipment.
Gambling Laws at Sea
Now, let’s get to the fun part—gambling! When you step into a casino on a cruise ship, you’re entering a legal gray area that combines maritime law, international treaties, and the specific laws of the flag state.
U.S. Regulations
For cruise ships departing from U.S. ports, the Cruise Ship Competitiveness Act of 1991 comes into play. This act allows U.S.-registered ships to offer gambling once they leave U.S. waters and enter international waters. However, once they’re out there, it’s the flag state’s laws that govern the casino operations.
Tax Implications
Hit the jackpot? Here’s where it gets tricky. If you’re a U.S. citizen, your winnings are subject to IRS reporting.
Casinos on ships that operate out of U.S. ports are required to issue IRS Form W-2G for substantial winnings (over $1,200 on slots, for instance). For winnings under this threshold, it’s up to the player to report them on their tax return.
Internal Regulation and Control
Cruise lines often follow internal regulations to ensure fair play and customer satisfaction. The Cruise Lines International Association (CLIA) enforces certain standards similar to those in land-based casinos in places like Nevada and New Jersey. These include rules for equipment, play procedures, and audits.
Potential Pitfalls and Disputes
What happens if you feel cheated at sea? Unlike land-based casinos, which have stringent regulatory oversight and accessible legal recourse, cruise ship casinos are a different beast.
If you have a dispute, your first point of contact is typically the onboard casino manager. If that doesn’t resolve the issue, you might have to deal with the cruise line’s head office on land, which can be a frustrating process.
Consumer Protection
Consumer protection laws that apply on land often don’t extend to international waters. This lack of oversight means that slot machine payout percentages on cruise ships may not be as favorable as those in land-based casinos.
Moreover, the absence of competition means cruise lines might not be as motivated to keep players happy compared to land casinos where another option is just a short walk away.
Given the complexity of laws governing cruise ship casinos, it’s wise to familiarize yourself with the terms and conditions of your cruise ticket.
These terms often include clauses about dispute resolution and jurisdiction, which can significantly impact your legal rights. If you find yourself in a tricky situation, consulting a lawyer who specializes in maritime law might be your best bet.