Online Gambling is a booming industry that is expected to expand rapidly in the next several years. However, the industry is still not legal in most parts of the world. For those interested in playing games online, it is important to understand the laws and regulations governing gambling in the United States.
First, there are a number of federal criminal statutes that are implicated by illegal gambling on the Internet. One of these is the Travel Act. The Travel Act governs the conduct of a person engaging in the unlawful activity of making interstate wagers on a game of chance.
Another is the Federal Communications Commission (FCC). The FCC’s authority extends to common carriers. It is possible that the FCC could take steps to prevent facilities or even the furnishing of such facilities.
There are also many state-specific gambling laws. In Washington, for example, it is illegal to operate a website that advertises gambling. That’s a problem, since it isn’t legal to offer games of skill in that state. But state officials have expressed concerns that the Internet could be used to bring illegal gambling into their jurisdictions.
The United States has taken action against a number of Internet gambling operators. This includes the Liechtenstein International Lottery, which offered the first online gaming venue for the general public. K23 Group Financial Services, the operator of the site, is currently in court, charged with money laundering and violating the Unlawful Internet Gambling Enforcement Act.
The CRS Report RS21984 offers a concise review of relevant statutes. It includes text and citations to the state gambling laws it covers. While there are other related reports, the CRS report is the only one that gives the best coverage of all of the relevant statutes.
The United States has also been embroiled in a legal battle over the UIGEA. It was able to seize $3.2 million from the owners of a Web site. PayPal, which offers online payment services, also received a warning from federal prosecutors that it could face prosecution for making transactions through illegal Internet gambling sites.
Some states have also adopted the Public Gambling Act, 1867. While not specifically addressing Internet Gambling, this act does include other types of activities, such as casinos and lotteries. A number of other state legislatures have also passed their own legislation. Interestingly, there is a gap between the state and federal legislation that must be bridged.
Finally, there are a number of constitutional arguments raised by those opposing the implementation of federal law. Most notably, the First Amendment has limited protection for “crime facilitating speech.” As a result, due process arguments have lessened.
All of these factors, coupled with the fact that state legislatures have different laws, make it difficult to regulate and police the Internet gambling industry. In addition to the problems associated with state and federal regulation, the commercial nature of the gambling business has also raised questions about the scope of the Commerce Clause.