Using the internet to place and receive bets on sporting events or contests is illegal. The term is defined in 31 U.S.C. 5362(10), which lists a series of criteria, including location verification, age verification, and appropriate data security standards. The law also makes use of Racketeer Influenced and Corrupt Organizations (RICO) provisions.
The Internet is awash in gambling sites, but it is not always the lawful way to play. In fact, some state officials have expressed concern that online gambling can be used to bring illegal gambling into their jurisdictions. In a few cases, the government has taken action against Internet gambling operations in the United States. In January of 2009, the United States marshals seized $3.2 million from a gambling site based in Costa Rica, called Tropical Paradise. The operation also was the subject of a public service announcement.
As far as the legality of gambling goes, there are several federal statutes that are in play. These include the Wire Act, the Illegal Gambling Business Act (IGBA), and the Money Laundering Control Act (MLCA). These statutes make it illegal to bet on sporting events, place and receive bets, and accept financial instruments for illegal Internet gambling. Additionally, owners of illegal gambling businesses can face up to five years in prison. Using the Internet for illegal gambling is also a crime in the Commonwealth of Puerto Rico.
The Illegal Gambling Business Act is the federal government’s response to the growing popularity of online gambling. It contains the same basic elements of state law, but the law is enforced at a national level. In addition to the federal government, states also have their own laws to enforce against illegal gambling businesses. For instance, the states of New York, Connecticut, Massachusetts, and New Jersey have all passed legislation to ban online gambling. Moreover, the law has a number of notable exemptions.
The aforementioned law has also been subject to scrutiny on constitutional grounds. The most common criticism is the lack of due process. In order to obtain a warrant, probable cause must exist. However, in a case involving online gambling, the Constitution’s First Amendment may be less demanding. In the same vein, the commercial nature of gambling business arguably satisfies the Commerce Clause objections.
The Travel Act is also a key piece of legislation to keep an eye on. This statute prohibits money laundering, illegal gambling on interstate commerce, and promotion of illegal gambling. The statute is not limited to interstate commerce, however, as it also covers shipments of gambling related goods and services to foreign countries. Also, the law may make it more difficult for state officials to enforce their own laws against gambling.
The most interesting law is not as straightforward as it may seem. The statutory measures may make it difficult for state officials to enforce their own laws, and the federal government may also be able to take advantage of the internet to bring legal gambling into their own jurisdictions.