Online Gambling in the United States

Online Gambling

Online Gambling involves the placing of bets on games of chance for money. It also includes casinos, online sports betting and virtual poker. Most countries allow online gambling. Some countries restrict gambling or prohibit it altogether. In the United States, legal forms of online gambling are found in some states and are illegal in others.

The United States Department of Justice has enacted legislation to prohibit illegal gambling. This legislation is commonly referred to as the “Wire Act.” It prohibits the illegal transmission of bets, contests, and gambling over the Internet.

However, the Wire Act is not the only federal law on the books that affects the illegal Internet gambling industry. Several other federal statutes are involved, too, including the Illegal Gambling Business Act (IGBA), the Travel Act, and the Racketeer Influenced and Corrupt Organizations (RICO) statutes.

There is some confusion over which federal statutes may apply to the illegal Internet gambling industry. As a general rule, the Wire Act is a more sweeping and general law than the other three. However, the IGBA and the Travel Act are more specific and have specific jurisdictions. Specifically, the Wire Act focuses on the sending and receiving of bets while the Travel Act focuses on the activities of players who use interstate facilities for unlawful activities.

Despite the uncertainty of the law, many states have regulated the online gambling industry, with the notable exception of New Jersey. During the early 1990s, a small number of gambling sites were active in the United States. Many of them were affiliated with the Liechtenstein International Lottery. Eventually, though, online gambling grew in popularity. By the mid-1990s, there were about 200 gambling sites in the United States. A Frost & Sullivan study revealed that online gambling revenue exceeded $830 million in 1998.

Although the Commerce Clause provides no explicit authority for regulating internet gambling, it has been questioned whether legislative action is a viable option for addressing this industry. Other issues have been raised, such as the state’s ability to regulate interstate gambling and the need for due process. Various attacks on the First Amendment free speech guarantee have not garnered much traction.

The CRS report RS21984: Remote Gaming, a study of the law, is an excellent source of information on online gambling, especially as it relates to the Travel Act and the Unlawful Internet Gambling Enforcement Act. The report also includes citations to state gambling laws.

Similarly, there are a number of bills in the House and Senate that would prohibit Internet gambling. These include HR 2046, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The bill was introduced by Rep. Barney Frank in 2007. Several other bills have been introduced, some with similar names, over the past five years. Currently, the Senate is awaiting the results of a hearing on the bill.

In addition to the legal framework, there are several technological solutions that may help prevent the spread of illicit online gambling. In the United States, some online sites use cryptocurrencies to power their payment services. Since most banks do not support these methods, the options are limited. Moreover, third-party payment processors do not share sensitive banking information with casinos.