Federal Laws and Online Gambling

Online Gambling

The gambling industry has changed significantly in the past five years, and one of the biggest trends has been the introduction of online gambling. This includes sports betting and casinos, among other games. Although state law primarily governs this activity, federal laws have become implicated.

As a result, state officials have expressed concerns about the Internet’s potential to spread illegal gambling throughout their jurisdictions. This concern has prompted a number of cases on the federal and state levels, resulting in the creation of a variety of federal and state criminal statutes.

These include the Wire Act, which prohibits illegal gambling on sporting events; the Unlawful Internet Gambling Enforcement Act, or UIGEA, which makes it unlawful to receive or transmit bets on the Internet; and the Illegal Gambling Business Act, which makes it illegal to engage in certain gambling business activities.

One of the most interesting recent developments involves a case involving a gambling operation in Costa Rica. The operator, Tropical Paradise, accepted ads from a company that sells advertisements, and the company was eventually charged with violating the Wire Act.

Similarly, a case in the 7th Circuit involved an Internet poker operation, which was accused of violating the Wire Act and the UIGEA. In this instance, the prosecution alleged that the owner of the operation had failed to report gross revenue of more than $2,000 for thirty days.

The Lopez Amendment was also introduced, and it contains elements that are designed to identify and separate low-level gambling cases. However, the Commerce Clause has been cited as a potential barrier to the enactment of these laws.

Posted in: Gambling