Various state and federal laws prohibit gambling, including the Internet. Under the Internet Gambling Act, illegal Internet gambling is defined as using a computer to place bets, receive bets, or transmit gambling-related information. In addition to state laws, the federal government has also enacted a number of laws that regulate the Internet, including the Wire Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations Act. These laws are designed to prevent illegal gambling businesses from operating, facilitating the use of financial instruments to facilitate illegal gambling, and accepting payment for illegal gambling activities. In addition, the Wire Act prohibits illegal gambling on sporting events and contests.
The Illegal Gambling Business Act prohibits gambling businesses from accepting payment for illegal Internet gambling. Owners and operators are subject to fines. Depending on the amount of gross revenue from the illegal gambling business, the owners and operators may face up to five years in prison. However, the owner or operator of an illegal gambling business must have a substantial amount of gambling activity and a continuous operation for at least thirty days to be convicted of this crime. The owner or operator is also prohibited from spending more than $10,000 of illegal gambling proceeds in a single day.
The Wire Act prohibits the transmission of bets and gambling-related information to other states. Additionally, the Wire Act prohibits illegal gambling by individuals on contests and sporting events, including the Super Bowl. The Wire Act also prohibits the transportation of gambling devices. These laws may be particularly difficult to enforce in the Internet age because there are several factors that can impede state enforcement policies. Specifically, the Internet is a global communications medium that may be used to bring illegal gambling into jurisdictions outside of the United States. The federal government also has jurisdiction over common carriers and common carriers’ facilities. The Federal Communications Commission also has jurisdiction over common carriers. If the Federal Communications Commission finds that a communications facility is being used for the purpose of illegal Internet gambling, the Commission may revoke its authorization or discontinue leasing the facility.
Section 1956 of the United States Code creates several distinct crimes, including laundering. The purpose of laundering is to conceal and disguise the illegal activity and the proceeds of the illegal activity. In addition, Section 1956 creates laundering for international purposes, law enforcement stings, and for evading taxes. These statutes may be particularly difficult to enforce because of the interstate and foreign elements of the Internet. However, a commercial nature of the gambling business may satisfy the Commerce Clause, which is the first clause of the United States Constitution.
Other federal criminal statutes implicated by illegal Internet gambling include the Money Laundering Control Act, the Travel Act, the Racketeer Influenced/Corrupt Organizations Act, and the Unlawful Internet Gambling Enforcement Act. However, these statutes have been criticized on constitutional grounds. In particular, these statutes have been criticized for not adequately protecting the First Amendment. The Due Process Clause has also been attacked, but the cases have had little success.