Several federal criminal statutes are implicated by illegal gambling on the Internet. Whether or not the Internet is a safe haven for illegal gambling is a contentious issue among state officials. This issue is also raised on a constitutional level. Specifically, questions have been raised about the scope of the Commerce Clause and the free speech rights of a citizen involved in an online gambling transaction.
The law in question is the Illegal Gambling Business Act (IGBA). It was enacted to prevent individuals from operating gambling businesses that offer gambling services on the Internet. The statute provides a maximum penalty of five years in prison for individuals who run an illegal gambling operation. In addition, an illegal gambling operation is subject to Racketeer Influenced and Corrupt Organization (RICO) provisions. IGBA also prohibits the acceptance of payments for illegal Internet bets.
The Travel Act is another federal statute that is implicated by illegal gambling on the Internet. It is a sweeping law that prohibits the facilitation of illegal gambling, the promotion of unlawful gambling, and the distribution of gambling proceeds. This law is designed to prevent online gambling businesses from facilitating money laundering, evading taxes, and promoting illicit activity. IGBA has been a controversial law, and has been the subject of several constitutional challenges.
Although the Travel Act is not as comprehensive as the Illegal Gambling Business Act, the statute does include several other statutes that are applicable to illegal Internet gambling. These include the following: (1) The Wire Act, which is a federal criminal statute prohibiting the illegal betting on sporting events. The statute also includes provisions prohibiting the use of a telephone to place bets, the use of a credit card to pay for gambling-related goods, and the use of the Internet to receive bets. The statute also prohibits the use of the Internet to transmit bets, and requires the use of appropriate data security standards.
The CRS Report RS21984 lists several other statutes related to illegal Internet gambling. These include the following: The Gambling Devices Transportation Act (GDOTA), which prohibits the transporting of gambling devices in interstate commerce, and the Racketeer Influenced and Corruption (RICO) provisions of the IGBA.
Although the law in question is a federal statute, its provisions are enforced primarily by state officials. Some have suggested that the commercial nature of the gambling business may be enough to satisfy the Commerce Clause. Other issues include the use of the Internet to bring illegal gambling to a state’s borders, and whether or not the State has the right to use the Federal Communications Commission to enforce the law.
Other federal statutes are also implicated by illegal Internet gambling. These include the following: the UIGEA, which prohibits the use of financial instruments to make payments for illegal Internet bets; the Wire Act, which prohibits the illegal betting on sporting events; the Gambling Devices Transportation Act (GDOTA), a federal law that regulates gambling on Indian lands; the Racketeer Influenced & Corruption (RICO) provisions of the Illegal Gambling Business Act (IGBA), which prohibits the operation of an illegal gambling business; and the Federal Communications Commission’s (FCC) ability to regulate the Internet, which may prevent the operation of gambling facilities on the Internet.