Online Gambling is a term used to describe a variety of gambling activities. These include sports betting, casinos, lottery and poker. Generally, online gambling is conducted by using the Internet. But it can also include games such as bingo or pool-selling. The use of the Internet to conduct unlawful gambling may be a violation of several federal criminal statutes.
Some federal statutes that are relevant to this discussion include the Wire Act, the Travel Act, the Illegal Gambling Business Act and the Unlawful Internet Gambling Enforcement Act. However, state law is the primary source of regulation for most forms of gambling. State officials have been concerned that the Internet could become a conduit for illegal gambling into their jurisdictions.
While the Commerce Clause does not prohibit state regulation of gambling, questions of legislative power have been raised. This has been the case in cases such as United States v. Nicolaou, United States v. Grey and United States v. O’Brien. Although these attacks rely on the First Amendment guarantee of free speech, they have failed to achieve much success.
While some state laws may limit the ability of Internet gambling sites to operate, the federal government has a strong policy of reinforcing those state laws. In 2002, the General Accounting Office published an overview of internet gambling issues. It provided some information about the potential for legal challenges to the enforcement of online gambling laws.
The Wire Act prohibits illegal Internet gambling on sporting events and contests. Additionally, the Travel Act prohibits gambling on interstate commerce. Since the Internet is a common carrier, the Federal Communications Commission may decide to terminate facilities or discontinue providing them.
The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibits accepting financial instruments from illegal Internet bets. In addition, the Commerce Clause has been invoked in several cases involving gambling. Because of the commercial nature of the business, the Clause has largely been satisfied.
In other cases, the due process concerns associated with state regulation of activities occurring overseas or in parts of the United States have been raised. The Commerce Clause has not been particularly demanding in those cases. Nonetheless, there has been some progress. For instance, the Sports betting industry agreed to launch a $3 million public-service campaign.
A few other federal cases have cited the First Amendment as a defense to the prosecution of Internet gambling. Those cases have been characterized as “limited first amendment” cases, meaning that the First Amendment protects the right to speech, but not the right to participate in it.
While it is difficult to establish that online gambling is not protected under the First Amendment, there have been limited instances in which the First Amendment has been challenged. These cases involved a bartender and managers of video poker machines.
Because there is no constitutionally significant interest in online gambling that is not protected by state law, these arguments have largely been discarded. However, other cases have raised First Amendment concerns, especially when the commercial nature of the gambling operation satisfies the Commerce Clause.