Online gambling is the act of placing bets on games of chance using the Internet. It consists of casino games, sports betting, virtual poker, lottery, and other activities. It is estimated that the global market for online gambling is worth about $40 billion each year. In the United States, it is legal to gamble on the Web. However, there are many federal laws and criminal statutes that are implicated by the act of placing bets on the Web. These include the Unlawful Internet Gambling Enforcement Act (UIGEA), the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) statutes, and the Travel Act.
A brief overview of these laws is provided in CRS Report RS21984: Internet Gambling: An Overview of Issues, published in December 2002. The report includes citations to the state gambling laws and the text of the relevant statutes.
The United States has been a hotbed of debate concerning the legality of Internet gambling. Various states have been concerned that the Internet can be used to illegally bring gambling into their jurisdictions. Many have raised due process concerns about regulation of activities that occur in part overseas, especially where they involve financial transactions in the U.S. Several have also questioned the legislative power of the Commerce Clause. Attempts to use the Commerce Clause to prohibit activities have largely failed.
Illegal Internet gambling is also unlawful under the Illegal Gambling Business Act (IGBA). IGBA defines unlawful Internet gambling as the transmission, receipt, or use of bets on an internet-based service, exclusively in one state, regardless of the amount of money involved. IGBA provides that an individual convicted of the crime can be imprisoned for up to five years. If the owner of an illegal gambling business has gross revenues of at least $2,000 on any single day, the business is subject to a fine. Moreover, if the Federal Communications Commission or the Department of Justice discontinues the lease or operation of facilities, the owners of illegal Internet casinos and poker rooms could find themselves out of business.
Despite these challenges, the United States is likely to continue to be a leader in the Internet gambling industry. In the coming months and years, more than half of the United States will be able to place bets on sports. This will make the internet an increasingly important resource for Americans looking to place bets on their favorite team.
While the most popular form of online gambling is sports betting, there are a variety of other forms. Some examples include video slots, virtual poker, professional poker, bingo, and lotteries. Other types of games of chance include slot machines, roulette, and pool-selling. Games like baccarat and blackjack are often played on the web.
Some argue that the act of playing games of chance is an appropriate candidate for First Amendment protection. Such arguments may be valid under certain circumstances, but the question of whether such activity is protected from prohibition on the basis of free speech is less clear. Even if such an argument were successful, it would not address the question of how to determine which of these activities are protected by the First Amendment.