Does the Federal Government Have the Power to Regulate Online Gambling?

Online Gambling

The gambling industry has undergone considerable changes over the past fifteen years, and the latest trend has been the increased availability of internet gambling. Internet gambling includes sports betting, casino games, and virtual poker. However, there is a significant distinction between gambling on the Internet and the more traditional forms of wagering. There are a number of other related laws, including the Wire Act, which prohibits illegal gambling on contests and athletic events. Those who violate the law can face fines of up to five years in prison, and in some cases, imprisonment. Similarly, the Racketeer Influenced and Corrupt Organizations (RICO) provisions bar illegal gambling business activities.

Other than the obvious legal restrictions, there have been a number of challenges to the enforcement of federal gambling laws, largely based on constitutional arguments. In addition to the Commerce Clause, other issues have been raised, including First Amendment objections to federal law.

Despite these objections, the commercial nature of the gambling business has remained unfazed. A number of states have expressed concerns that the Internet could be used to bring illegal gambling to their jurisdictions, and federal law has reinforced these state laws in many instances. For instance, the Department of Justice recently warned PayPal that it may face prosecution if it does not cease its activities in the United States. Meanwhile, the DSM-5 Taskforce calls for further research on the impact of Internet gaming on the public’s mental health.

Another recent development is the introduction of a new category of Internet Gaming Disorder. This classification was added to the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition. It is also worth noting that the DSM-5 lists a number of new categories, including Non-Substance Behavioural Addiction.

As the industry grows, the question remains as to whether or not the federal government has the power to regulate the internet gambling industry. Various attacks have been made based on the Commerce Clause, the First Amendment, and the Due Process Clause. These attempts have produced very little success. While the commercial nature of the gambling industry seems to satisfy some of these objections, it remains to be seen how much influence the federal government will have over the industry.

In the meantime, the United States has introduced the Unlawful Internet Gambling Enforcement Act of 2006. Under this law, owners of illegal online gambling businesses must abide by a number of specific conditions. They must have gross revenue of at least $2,000 on any given day, and they must maintain a substantially continuous operation for thirty days or more. Additionally, they must use appropriate data security measures to protect the privacy of their customers. Furthermore, they must comply with certain age verification and location verification requirements.

The law is still in its infancy, but the UIGEA is a big step in the right direction. However, it is not without its drawbacks. Some of its provisions have been criticized for not being enough to stop illegal Internet gambling. Further, the statute does not cover remote gaming.