Online gambling is the use of the Internet to play games such as poker or to make sports bets. This includes casinos, sports betting sites and virtual poker. Gambling is generally illegal in the United States. The laws governing it are primarily state law, although federal law is also applicable. In recent years, the revenue generated by online gambling reached a staggering $400 billion.
The most significant legal issue surrounding online gambling is whether or not it is legal under the current laws. A number of state officials are concerned about the potential for the internet to bring illegal gambling into their jurisdictions. However, it appears that the commercial nature of the gambling industry may satisfy the doubts posed by the Commerce Clause.
For example, it was estimated that the worldwide gross win from gambling in 1999 was approximately $830 million. By 2008, the total had increased to around $21 billion. Although this is a small percentage of the overall gambling market, it represents a huge increase from the tens of millions of bets made in 1998.
Another major legal challenge to the practice of online gambling is the Wire Act, which prohibits the act of gambling on sporting events. This law is enforced under the Federal Communications Commission, which has the authority to regulate common carriers and provide facilities to customers. Therefore, it is possible that the FCC may decide to stop providing such facilities altogether.
There are numerous federal criminal statutes that have been implicated by the practice of illegal internet gambling. These include the following: the UIGEA, the Racketeer Influenced and Corrupt Organizations (RICO) provisions, the Wire Act, and the Illegal Gambling Business Act. Each of these has its own merits and is worth investigating for its own purposes.
As far as a legal definition of what is considered legal and illegal, the simplest distinction is that illegal internet gambling is a violation of the Wire Act. Other statutes are more complicated, and some are more specific to different types of gambling. Specifically, illegal Internet gambling is defined as the transmission of bets or wagers by individuals to and from the Internet. Using the Internet for this purpose is also unlawful under the Federal Trade Commission Act and the Illegal Gambling Business Act.
Another important law pertaining to online gambling is the Travel Act, which prohibits the use of interstate facilities for unlawful activity. It applies to Internet casinos, sports betting sites, and gaming parlors. If an individual uses an interstate facility to engage in an unlawful activity, the owner of the facility is subject to penalties under the law.
The best way to learn about these laws is to read a comprehensive guide. One such guide is published by the Marquette Sports Law Journal, which offers an overview of the issues involved.
While the UIGEA is the federal law that most directly affects online gambling, there are several state laws that have a direct impact as well. New York State is especially concerned about the possibility of the internet bringing illegal gambling into the state.