Unlawful internet gambling is a term used to describe the placing of bets on the Internet without permission. This includes sports betting and casinos. Several federal criminal statutes apply to illegal Internet gambling. These include the Illegal Gambling Business Act, the Wire Act, the Unlawful Internet Gambling Enforcement Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions.
The most popular forms of illegal online gambling are the Internet casino and the Internet poker site. Both of these involve graphical representations of the real casino game. Online poker sites also use random number generators to determine the winner of each hand. Unlike the human dealer in a live poker game, an online poker site automatically handles chips. An Internet casino can be accessed via a web browser or by downloading a software client.
Unlawful online gambling is generally defined as using the Internet to place bets, receive bets, or transmit bets. Although the laws have been challenged on constitutional grounds, such attacks have generally failed. Other arguments, such as those based on the Commerce Clause or the First Amendment, have been less successful.
Section 1956 of the Criminal Code creates several distinct crimes related to unlawful Internet gambling. Some of the more interesting aspects of this section are the prohibition of the use of financial instruments from such activities and the creation of a “sting” for law enforcement purposes. Additionally, this section also creates laundering for international or law enforcement purposes. It is these provisions that have led to some of the most notable legal cases involving Internet gambling.
The first Internet gambling venue for the general public was the Liechtenstein International Lottery. In addition, the United States Marshalls have seized nearly $3 million from Discovery Communications, which had provided advertisements to the Tropical Paradise online casino. While the sting was ultimately unsuccessful, the case was an important test of whether the Internet could be used to bring illegal gambling into the U.S. A second case involved Sporting News, which agreed to pay a $4.2 million fine and launch a $3 million public-service campaign.
The law also prohibits the use of common carriers or telecommunications facilities to facilitate the initiation of an illegal Internet gambling transaction. These provisions are complemented by the Travel Act, which is a federal law that regulates interstate gambling. Similarly, the Federal Communications Commission, which is responsible for furnishing and leasing facilities, may discontinue its services.
Although some argue that federal law does not adequately protect individuals from the consequences of unlawful Internet gambling, the reality is that this type of activity is generally covered by state laws. However, the presence of an interstate element complicates enforcement policies of these laws. Also, while the commercial nature of the gambling industry has been a source of debate, it is believed that the commerce clause has been adequately satisfied in this case.
Although the UIGEA is not yet in effect, many of the federal laws that make gambling illegal have been challenged on constitutional grounds. For instance, the Travel Act, which is the law that makes it illegal to play on an Internet gambling site in interstate commerce, has been used to challenge the government’s ability to prosecute illegal Internet gambling. In addition, state officials have expressed concern that the Internet could be used to bring illegal gambling activities into their jurisdictions.