Online gambling is the activity of placing bets and playing games of chance or skill for money via the Internet. These activities include casinos, sports betting, and virtual poker. Some forms of online gambling are legal in many countries, while others are not. In some states, online gambling is illegal, even if it is conducted through a licensed and regulated site.
Although several states have a legal framework for online gambling, some state officials have expressed apprehension that the Internet could be used to promote and facilitate illegal gambling. This concern has led to the introduction of laws designed to restrict and regulate such activities.
The federal government’s response has focused on the Wire Act. This act prohibits accepting financial instruments from people engaged in illegal Internet bets. It also prohibits those who conduct business through an internet portal.
However, the First Amendment’s free speech protections have not been fully protected. Some state officials have expressed concern that if the federal government encroaches on state authority, they will be forced to censor or regulate their own citizens. Other challenges to the law have been raised based on the Commerce Clause and the Due Process Clause.
Federal legislation addressing online gambling first emerged in the late 1990s. Several bills were introduced in both the Senate and the House. A bill called the Internet Gambling Prohibition Act was proposed in the Senate in 1999. Another similar bill was introduced in the House in 2007.
After several years of debate and drafting, the federal government finally approved legislation to address Internet gambling. The legislation was called HR 2046. It requires that online gambling service providers obtain a license from the director of the Financial Crimes Enforcement Network.