Despite the fact that online gambling has become a popular pastime, it is still a risky activity that could lead to financial ruin. In the US, illegal gambling on the Internet is considered to be a violation of seven federal criminal statutes. In addition to the Wire Act, which prohibits unlawful wagering on sports, the Travel Act and the Illegal Gambling Business Act also apply. There are also Racketeer Influenced and Corrupt Organizations (RICO) provisions that prohibit the illegal operation of a gambling business.
The first online gambling venue for the general public was the Liechtenstein International Lottery. This was followed by the creation of the online sports betting facility in the state of New Jersey. However, there are many other states that permit gambling on the Internet. Twenty states permit residents to wager on poker and other forms of sporting events through the Internet. The New Jersey Division of Gaming Enforcement regulates the online wagering industry in the Garden State.
There are many different kinds of gambling, including games of chance, lotteries, horse races, pool-selling, and even bookmaking. The laws regulating these activities vary from state to state. Some states have a relatively liberal set of laws pertaining to online gambling, while others have more restrictive regulations. In 2011, the Department of Justice allowed states to pass legislation regarding online gambling. These laws are designed to help protect consumers from fraudulent or illegal Internet casinos.
One of the major problems with illegal online gambling is the question of how to distinguish between the criminal activities that occur on the Internet and the more benign activities of legitimate casinos. Although the law is clear on the issue of gambling, it has not been made entirely clear on the question of what constitutes a violation of federal law.
Several statutes have been used to prosecute online gambling, including the Wire Act and the Illegal Gambling Business Act. These statutes are designed to protect the integrity of sports contests and to prevent illegal wagering on sports.
In order to defend the legitimacy of the law, the US government has seized several properties that were involved in the illegal gambling operations. This case involves the United States v. K23 Group Financial Services. These entities were charged with violating the UIGEA. The government alleged that the companies operated a virtual casino that charged players illegally. The company agreed to pay a $4.2 million fine and launch a public service campaign. The case was also filed against Discovery Communications, which accepted advertisements from Tropical Paradise.
Another federal crime involved the unlawful use of interstate facilities for gambling. In the 4th Circuit case of United States v. Nicolaou, five people were involved in a thirty-day period. The court found that the acts of entering a bet, transmitting information from New York through the Internet, and receiving bets constitute gambling activity in New York.
These laws have been challenged on constitutional grounds. Specifically, questions have been raised about the extent to which the Commerce Clause grants the federal government the authority to enforce such laws. The commercial nature of the gambling industry seems to satisfy the Commerce Clause objections, but the due process arguments have been largely ineffective.
