Despite the fact that Internet gambling is a lucrative business, the laws and regulations governing it are largely the responsibility of the states. In some cases, state laws prohibit gambling, while in other cases, gambling is legal. In addition to the state laws, the federal government enforces certain criminal statutes. These include the Wire Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations (RICO) provisions.
The Wire Act prohibits gambling on sporting events or contests. It also prohibits interstate gambling. However, state officials have expressed concern that the Internet could be used to bring illegal gambling into their jurisdictions. In fact, the federal government has prosecuted illegal Internet gambling on the basis of federal statutes. In several cases, these statutes have been challenged on constitutional grounds.
The Commerce Clause is often the basis for arguments about legislative power. The commercial nature of the gambling business seems to satisfy constitutional objections, but the question of whether the Commerce Clause allows the government to regulate interstate commerce is still a subject of debate. A few states, including Nevada and New Jersey, have adopted laws permitting online gambling.
While the federal government has enforced these laws, there have been several cases based on constitutional issues. These include United States v. Nicolaou, United States v. Grey, and United States v. O’Brien. These cases involved gross revenues of $2000 or more, and involved five or more people at a single time. The cases involved bartenders and managers of establishments with video poker machines, layoff bettors, and waitresses who served drinks.
Among the state and federal statutes that are implicated in illegal Internet gambling are the Wire Act, the Illegal Gambling Businesses Act, and the Racketeer Impacted and Corrupt Organizations (RICO) statutes. These federal statutes have also been challenged on constitutional grounds, including the First Amendment. However, attacks based on these constitutional provisions have often been unsuccessful.
In one of the most significant cases, the US Department of Justice determined that real money online casino games were legal. In the event of legal prosecution, the operators of these gambling websites will be charged with violations of the 18 U.S.C. 1955. They are also charged with money laundering.
Section 1956 creates several distinct crimes, including laundering for law enforcement stings, concealing an intent to promote illicit activity, and laundering for international purposes. It also creates the crime of laundering to evade taxes. These crimes have raised constitutional questions regarding the enforcing the law on Internet gambling.
The US Department of Justice also determined that online fantasy sports betting was legal. In this case, Sporting News agreed to pay a fine of $4.2 million and launch a public-service campaign. It also accepted ads from the Costa Rican casino operation, Tropical Paradise.
A few states, including Delaware, New Jersey, and Nevada, have adopted laws permitting online gambling. However, some states do not allow in-person betting. This can make it difficult to determine whether the laws of a particular state apply to online gambling.