Despite legalization in several countries around the world, there are still some issues surrounding online gambling. These concerns can be summarized into three general categories. First, state-specific gambling law. Second, governmental regulations for online casinos. Finally, privacy and security issues.
The United States has six states where online casinos are legal. Moreover, several European countries have also legalized online gambling.
However, some state officials have expressed concern that the internet could bring illegal gambling into their jurisdictions. In fact, the United States marshals recently seized $3.2 million from Discovery Communications, which accepted ads from Tropical Paradise.
The United States’ criminal statutes that are implicated by illegal Internet gambling are the Wire Act, the Illegal Gambling Business Act, the Travel Act, the Money Laundering Prevention and Enforcement Act, and the Interstate Commerce Act. All of these laws are aimed at preventing illegal gambling on sports and other events.
In the United States, the Commerce Clause allows only limited protection for free speech. Thus, the government can only prosecute crime if it can prove that it was motivated by a state-law interest that is at least as constitutional in magnitude. Consequently, in some cases, questions have been raised regarding the government’s authority under the Commerce Clause.
These issues have been addressed in CRS Report RS21984 (released in abridged form). The report includes citations to state-specific gambling laws. It is important to understand the gambling legislation of your state before you start your gambling business.