Online gambling has grown in popularity over the years, with more and more people taking advantage of this relatively new, and legal, form of gaming. The proliferation of mobile applications has made it easier than ever to place bets on the go. It is also becoming more common to see casinos and other gambling facilities offer online versions of their operations. Although there is a long list of states that have legalized online gambling, only a few of them have taken it to the next level. Among the states that have recently made this leap are Arizona, Indiana, Maryland, Ohio, Pennsylvania, and Virginia.
The benefits of online gambling are many. Most notably, it brings the Las Vegas experience to your smartphone. In addition, it allows you to pick your favorite casino games, such as poker, and then wager on them without ever leaving the comfort of your home. Additionally, it can be used to facilitate work meetings or to connect with friends and family.
In the United States, state laws are primarily responsible for regulating this activity. However, federal law may reinforce these state laws. Specifically, UIGEA, the Unlawful Internet Gambling Enforcement Act, is a statute that enforces online gambling while also regulating commercial activity. As such, it includes several factors to weed out low-level gambling cases. These include appropriate data security standards, age verification, and location verification. Nonetheless, it has also been criticized on constitutional grounds. Consequently, some state officials have expressed concerns about the threat of the internet to introduce illegal gambling into their jurisdictions.
Aside from the aforementioned statutes, there are also seven criminal statutes that prohibit unlawful Internet gambling. For example, the Wire Act, which is considered the bane of online gambling operators, prohibits the illegal gambling of contests and sporting events. There is also the Illegal Gambling Business Act, which essentially makes it illegal to operate a business that enables or promotes the use of the internet to engage in illegal gambling.
Another federal statute, the Travel Act, prohibits the use of interstate facilities for unlawful activities. This law, though not cited as often as the aforementioned UIGEA or the Wire Act, has been the subject of a number of attacks on the basis of its due process protections. Even PayPal, which was not cited as a target in this particular attack, was warned that it could face prosecution.
The best place to find out more about the aforementioned law and other laws regulating online gambling is through the CRS Report RS22749, which contains a short explanation of the various statutes cited. If you are looking for a more comprehensive overview, you can consult Internet Gambling: An Overview of Issues, published by the General Accounting Office (GAO) in December 2002.
One of the most interesting recent legal developments involving the online gambling industry is the case of Sporting News, an offshore online-based sports bookmaker. In December, the U.S. marshals seized $3.2 million from the company, which was later reduced to $3 million in a settlement with the Justice Department.