Online Gambling and the Federal Government

Online Gambling

Online Gambling is playing games of chance for money. This includes casinos, sports betting, and virtual poker. It also includes gambling on lotteries, pool-selling, and even maintaining roulette wheels and dice tables.

The Department of Justice is investigating ways to regulate online gambling. However, state officials are worried about the potential for Internet-based gambling to bring illegal gambling into their jurisdictions.

The federal government has already prosecuted some illegal Internet gambling activities. The Department of Justice notified PayPal that it may be subject to prosecution. It also warned that online gambling operators may use fake registration addresses and customer support contact names.

Internet-based gambling poses a danger to consumers and businesses. It threatens to bring gambling into homes and offices. There are seven federal criminal statutes that are implicated by illegal Internet gambling.

These laws include the Travel Act, the Wire Act, and the Racketeer Influenced and Corrupt Organizations (RICO) provisions. The Travel Act prohibits illegal gambling on interstate commerce, and the Wire Act applies to illegal wagering businesses.

The Commerce Clause theory of power assumes that the federal government has the power to regulate any activity in the U.S. That doctrine has been challenged by a First Amendment claim. Although Congress has used its Commerce Clause power to regulate some aspects of gambling, this has not led to much success.

The Internet Gambling Regulation and Tax Enforcement Act would license and tax Internet gambling businesses. It would also require that these companies adhere to data security standards.