Online gambling is defined as using the Internet to place bets, receive bets, or to conduct other gambling transactions. It also includes casino gaming and online poker. The United States has laws that criminalize certain types of illegal Internet gambling. However, there are some exceptions, and these will be discussed below.
As a result, online gambling can be found in a number of states, and these state laws often govern a variety of different types of gambling. Some states regulate the age at which a person can bet, others require that the bet be placed in a land-based casino, while other states regulate online wagering. For example, in New Jersey, internet gambling operators can only operate if they obtain a license from the state Gaming Control Board. In addition, some states have a minimum age requirement for all types of gambling. A number of states have passed legislation that legalizes sports betting. These laws have been challenged on constitutional grounds.
Unlike state gambling laws, federal law has not been particularly proactive in enforcing online gambling regulations. However, the federal government’s enforcement of its gambling laws has been challenged on both constitutional and administrative grounds. Federal law may actually preempt state action in the Internet gambling arena, especially if the Internet is used for illegal activities.
For example, the Travel Act imposes a restriction on players who use interstate facilities to engage in unlawful activities. Similarly, the federal Indian Gaming Regulatory Act governs gambling on Indian reservations. State officials have expressed concern that the Internet could be used to bring illegal gambling into their jurisdictions. However, it is unclear whether the Commerce Clause doctrine will preempt state legislation.
Moreover, UIGEA regulations do not prevent Internet gambling businesses from accepting bets from the U.S. They do, however, prevent financial institutions from accepting bets from those who have committed illegal acts on the Internet. Additionally, UIGEA contains factors that help weed out low-level gambling cases.
One of the biggest issues in implementing federal law is the definition of “unlawful Internet gambling.” It is not always clear what constitutes a crime and what does not. Currently, Section 5362(10) defines unlawful Internet gambling as the placing of bets on the Internet within a single state. However, the Department of Justice recently clarified that this term is not limited to online casinos.
Another area of controversy is the Wire Act of 1961, which was created before the Internet. It was intended to help combat the practice of racketeering. However, the definition of “wire” appears to encompass the entire telecommunications infrastructure, which could be used to transport gambling-related information. If a person transmits or accepts financial instruments for an Internet gambling transaction, they can be fined and imprisoned. This is a major concern for state officials.
Several state laws have been enacted to prevent illegal online gambling, including the Michigan Lawful Internet Gaming Act of 2011 and the Illinois Lottery’s Digital Sale of Lottery Tickets Act. Additionally, several other states have proposed bills that would legalize sports betting.