The Federal Government’s Role in Online Gambling

Gambling is a recreational activity involving the placing of bets, playing games, and engaging in other forms of wagering. The legality of these activities is governed by state law. However, the federal government has jurisdiction over some of these transactions, and is also empowered to enforce criminal statutes. For example, the Wire Act and the Illegal Gambling Business Act prohibit the placing of bets, receiving bets, and using the internet for these purposes.

There are many federal and state laws that are aimed at illegal Internet gambling. Some of these include the Unlawful Internet Gambling Enforcement Act (UIGEA) and the Racketeer Influenced and Corrupt Organizations (RICO) provisions. Other federal laws that regulate online gambling are the Travel Act and the Wire Act. In addition, each state has taken a bit of time to enact their own legislation.

The most notable federal statute is the UIGEA, which was passed in 2006. This act aims to curb the activities of companies that provide financial services to those that engage in illegal Internet gambling. It also sets a maximum limit for how much money can be spent on illegal gambling activities at one time.

The first legal Internet gambling venue was the Liechtenstein International Lottery. Now, the industry is moving into the virtual world, with casinos, sports betting, and other forms of gambling available to consumers on the web. New Jersey leads the pack, offering a variety of payment methods designed specifically for its regulated Internet casinos.

Several states have ruled that online casino payments are legal, although a few have not. A number of banks and credit cards allow users to deposit and withdraw funds via online bank transfers. These transactions are relatively easy to do, but they can be slow and cumbersome. Banks often charge flat fees for these transfers. As such, they have been the biggest hurdle in the regulated U.S. market.

Another important federal law is the Wire Act, which makes it illegal to place bets on a sporting event on the Internet. Additionally, the Travel Act regulates the use of interstate facilities by those who participate in illegal Internet gambling. Moreover, the Federal Communications Commission has the power to slap fees on providers of common carrier facilities. And, if they aren’t careful, they could stop supplying such facilities altogether.

Although it’s unclear whether a single, federal, or state-specific law can effectively address all of these issues, the UIGEA and the Travel Act are a good start. Furthermore, state officials have expressed concern that the Internet can be used to bring illegal gambling into their own jurisdictions. Nonetheless, these laws have been able to deter some forms of illegal gambling, and the regulated markets have been growing steadily.

While the most comprehensive report on online gambling has not yet been published, the CRS has produced a more comprehensive abridged version. Among other things, the report highlights the most significant legal changes in the last decade.

It should be noted that there is a large difference between gambling in a state and gambling in a foreign country. This means that the First Amendment restrictions on home-based gambling do not apply. On the other hand, it should be noted that the commercial nature of the gambling business may well satisfy the Commerce Clause.