Federal Laws and Online Gambling
Online gambling has become a popular pastime in recent years. This includes casino games, virtual poker, sports betting and lottery games. The first online gambling venue for the general public was the Liechtenstein International Lottery. However, there are also many websites geared at the casino gaming set. These websites offer hundreds of different game providers and options, and often include live dealer and other forms of real-time gambling.
There are several federal laws that regulate Internet gambling. These are the Wire Act, the Illegal Gambling Business Act, the Travel Act and the Racketeer Influenced and Corrupt Organizations (RICO) provisions. Each one has its own merits and limitations.
The Wire Act prohibits illegal gambling on contests. It may also apply to players using interstate facilities for unlawful activities. Similarly, the Travel Act prohibits illegal gambling on interstate commerce. Additionally, the UIGEA bars financial institutions from receiving payment from those engaged in unlawful Internet gambling.
While all of these laws are important, the UIGEA and the Travel Act are the two most notable. One of the most impressive aspects of these statutes is their ability to reinforce state law. Several states, such as New York, have a lot of interest in how the Internet can be used to carry illegal gambling into their jurisdictions. Another is the possibility that a foreign actor could exploit the U.S. government’s regulatory zeal to bring illegal gambling to the U.S. Moreover, the fact that this legislation can be enforced overseas has many state officials concerned about how it will affect their jurisdictions.
The aforementioned UIGEA and Travel Act have been challenged on constitutional grounds. In particular, there have been questions raised about the statutory capacity of the Commerce Clause to authorize the issuance of the aforementioned laws.
In addition to the aforementioned UIGEA and Travel act, there are other federal criminal statutes that have been implicated by online gambling. These include the Wire Act, the Illegal Gambling Businesses Act, the Unlawful Internet Gambling Enforcement Act and the Racketeer Influenced & Corrupt Organizations (RICO) provisions. Among other things, these statutes provide some of the most comprehensive enforcement measures in the nation.
The best way to get a sense of the major federal criminal statutes that are implicated by illegal Internet gambling is to read the CRS Report RS21984: Remote Gaming: A Legislative Appraisal. While the report does not cover the more controversial areas of online gambling, such as the United States’ attempt to prosecute PayPal for its alleged involvement in illegal Internet bets, it does describe the various citations to state gambling laws.
There are also a number of ad hominem attacks, such as claiming that gambling is a violation of the First Amendment. Unfortunately, these arguments have gotten little traction. On the other hand, there has been some success with attacks that rely on the aforementioned First Amendment guarantee of free speech.
The CRS Report RS22749: abridged e-book about the aforementioned RS21984 is an entertaining read. It includes a variety of citations to the aforementioned laws and other related statutes. Even though it is only a brief overview of the relevant laws, it contains some interesting points of discussion.