The proliferation of online gambling has made it easier to place bets on sporting events. However, this has also created challenges for the federal government in enforcing federal gambling laws. Many state officials are concerned about the possibility of bringing illegal gambling into their jurisdictions.
Federal laws that are relevant to illegal Internet gambling include the Wire Act, the Illegal Gambling Business Act (UIGBA), the Travel Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions. These statutes provide various criminal penalties for the acts of illegal Internet gamblers.
Under the UIGBA, the government has the authority to prosecute Internet poker operators that engage in financial transactions with players. Additionally, the law prohibits the acceptance of financial instruments from Internet bets. This means that people who engage in illegal Internet bets cannot obtain financial instruments, such as credit cards, from other people.
While the UIGBA does not explicitly prohibit betting on sports, it is a federal crime to place bets on a sporting event. For example, if you bet on the outcome of a game, you have violated the Wire Act. A bet on the outcome of a football game is illegal, even if you bet on the number of points scored.
Another federal law that has been implicated in UIGBA prosecutions is the Gambling Devices Transportation Act (GDTA). This law, formerly the Johnson Act, is aimed at preventing the transportation of gambling devices. In a recent U.S. marshals seizure, Discovery Communications was found to have accepted ads from a Costa Rican casino operation. During the course of this case, the United States government seized nearly $3 million.
Despite these federal provisions, the commercial nature of the gambling business seems to satisfy Commerce Clause concerns. Some attacks have relied on the Due Process Clause, which protects citizens from state-sponsored deprivation of rights, but have had little success.
As with many other matters, the issue of whether the federal government can use its power to enforce gambling laws on the Internet has been debated on constitutional grounds. One such argument involves the Commerce Clause, which states that the federal government “shall have the power to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Journalists the right to speak without restraint.”
While the UIGBA is an important legislative tool, it is clear that the government does not have the constitutional authority to prosecute illegal Internet bettors. On the other hand, the Lopez Amendment, a law passed by Congress in 2002, provides a framework for identifying and weeding out low-level cases.
Finally, the Travel Act provides the government with authority to prosecute players who engage in unlawful activities using interstate facilities. This includes Internet casinos, which are considered to be “interstate” facilities, and telecommunications services.
It is possible that the Federal Communications Commission will discontinue providing or leasing such facilities. This may be a problem because some of the activities regulated under the law occur in part overseas. Therefore, the state may not be able to adequately enforce its policies.