Generally, internet gambling is considered illegal under the Wire Act and the Illegal Gambling Business Act. These federal criminal statutes prohibit any person from using the internet to bet on any sporting event, enter a contest or receive bets. These crimes also violate Racketeer Influenced and Corrupt Organizations (RICO) provisions. These provisions are also applicable to Internet poker operators.
The United States has enacted several laws that prohibit illegal gambling on the internet, including the Illegal Gambling Business Act and the Racketeer Influenced and Corruption Act (RICO). The Illegal Gambling Business Act, for instance, prohibits businesses from facilitating Internet gambling. The Racketeer Influenced and Colrupt Organizations (RICO) Act, on the other hand, is a more specific statute that prohibits the unlawful gambling business.
In addition to the Illegal Gambling Business Act and RICO, the federal government has imposed a number of criminal statutes that are implicated by illegal Internet gambling. These include the Wire Act, the Interstate Commerce Clause, the Racketeer Influenced Corruption (RIC) Act, the Unlawful Internet Gambling Enforcement Act (UIGEA), and the Racketeer Influenced Organizations Act (RIO).
Although the federal government has imposed a number federal criminal statutes, prosecutors have been increasingly relying on the Commerce Clause and the Free Speech Clause to prosecute online gambling cases. These attacks have not been successful, however. The Commerce Clause is a powerful tool that allows the federal government to enforce federal law, but there are a number of issues that have raised constitutional concerns.
For example, the Commerce Clause raises questions about whether a state law enacted to prevent certain forms of sexual conduct in the home may be applied to online gambling. In a 2002 article, “Internet Gambling: Overview of Issues,” the General Accounting Office noted that state officials have expressed concern that the Internet could be used to bring illegal gambling into their jurisdictions. The Congressional Research Service (CRS) report RS21984 discusses the issue. The CRS report also includes citations to state laws and is available in a downloadable abridged version.
The Free Speech Clause, however, does not give free speech the same protection. In fact, the Commerce Clause only provides limited protection for speech facilitated by crime. In some cases, however, the commercial nature of a gambling business may satisfy the Commerce Clause. In the case of the United States v. K23 Group Financial Services, prosecutors accused Internet poker operators of conducting illegal gambling business activities under 18 U.S.C. 1955.
As a result, the Federal Communications Commission (FCC) is currently examining whether the federal government should exercise its authority to enforce its laws against Internet gambling. The FCC has the authority to shut down or discontinue facilities and services that are not providing an acceptable level of service to the public. The FCC has also been authorized to make changes to its policies, including the ability to prohibit certain forms of Internet communications, which could affect the online gambling industry.
Another issue to consider is whether the First Amendment guarantees free speech when financial transactions take place in the United States. The United States has been enforcing its gambling laws on constitutional grounds, but these arguments have not been successful.