Internet gambling is the activity of placing and receiving wagers or bets via the Internet. Internet-based gambling is facilitated by technological advances, including the growth of high-speed internet connections. Moreover, the availability of a variety of Internet-enabled devices allows people to participate in gambling without having to travel.
Among the many issues associated with Internet gambling are its legality and the impact on consumers and businesses. The federal government has attempted to regulate this new form of gaming, while allowing states to maintain their control over gambling in their jurisdictions. However, state officials have expressed concerns that the Internet could be used to promote illegal gambling in their communities. Although some states have enacted legal online gambling regulations, there has been a lack of enforcement. In addition, there are several federal criminal statutes that are implicated in the illegal Internet gambling business.
First, the Wire Act is a federal statute that is applicable to wagering businesses. Under the statute, operators can be fined and imprisoned for violating the act. This law applies to Internet casinos as well. It is not clear whether the Wire Act applies to other forms of gambling, such as online lotteries. On the other hand, the Travel Act is a federal law that prohibits the use of interstate facilities for illegal gambling.
Second, the Internet Gambling Regulation and Tax Enforcement Act would regulate and tax the operation of internet gambling businesses. The legislation would also license Internet gambling establishments. A related bill, the Skill Game Protection Act, would clarify the Wire Act to exempt certain games. These laws, however, are not uniform and are often challenged on constitutional grounds.
Third, there are a number of other federal statutes that are involved in the illegal Internet gambling business. Some of these statutes include the Travel Act, the Illegal Gambling Business Act, and the Wire Act. Others include the Racketeer Influenced and Corrupt Organizations (RICO) Act, which prohibits activities in the gambling industry.
Finally, there are the Commerce Clause and the First Amendment. While there have been a number of attacks based on these clauses, the effects have been limited. As a result, the Department of Justice has maintained that all forms of Internet gambling are unlawful. Despite this, the Department has encouraged states to take action to enforce their own online gambling laws.
For example, the United States v. K23 Group Financial Services is an ongoing criminal case that charges a group of Internet poker operators for money laundering and violations of 18 U.S.C. 1955. Rather than arguing for a specific statute, the Justice Department has argued that the best practice is to make it clear that the UIGEA is the law and that any company that operates a gambling site in violation of the statute is subject to prosecution.
Overall, the research on the effects of Internet gambling is still in its infancy, and new findings are emerging all the time. However, it is important to understand what has been learned so far. The following review aims to give an overview of the most noteworthy discoveries and trends in this area of law.