Online gambling in the United States began to increase in the 1990s. It was a way for anyone with a web browser to place bets on sporting events, casinos, and other games of chance. At the time, online gambling seemed like an end run around government control. However, the US Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992 in 2018, allowing states to regulate and legalize online sports betting. The federal government has no plans to take action on online gambling at this time, and it appears that the law will be left to the states.
For many years, the law governing online gambling in the United States was the Wire Act. This law was designed to work with antiracketeering laws. In this respect, the Wire Act of 1961 was designed to protect against criminal conduct by betting operators. Even though the Wire Act is not applicable to digital wagering, it does apply to wagering businesses. If an operator is convicted, he or she can be fined and imprisoned.
A few states have already legalized some forms of online gambling, including Nevada and New Jersey. The latter state has been the first to legalize an online casino. But most states have not been as active in enforcing their Internet gambling laws. State officials have expressed concern that the Internet could be used to bring illegal gambling into their jurisdictions. As a result, lawmakers are considering whether or not to pass legislation regulating and taxing the industry.
One issue that arose during the legislative process was the definition of unlawful Internet gambling. According to the Department of Justice, “unlawful” Internet gambling means using at least part of the internet for gambling activities. This includes placing bets, receiving bets, and transmitting bets. Moreover, it is illegal to accept financial instruments from people who place illegal bets on the internet.
Another federal statute is the Travel Act. This statute applies to Internet casinos, wagering businesses, and players who use interstate facilities for unlawful activities. Under the Travel Act, the state may prevent a player from using a state facility to make illegal bets or to engage in an activity that is unlawful elsewhere. While this statute does not prevent online wagering, it does require that online bettors use legal facilities.
Some states have been actively enforcing their Internet gambling laws, but it is not clear that the federal government will preempt their efforts. Nonetheless, the dormant Commerce Clause doctrine has raised questions about the power of the federal government to legislate.
In addition to UIGEA, Congress is considering several other bills relating to Internet gambling. The Internet Gambling Regulation and Tax Enforcement Act would establish a regulatory framework for internet gambling businesses. On the other hand, the Federal Communications Commission (FCC) has been authorized to discontinue furnishing or leasing facilities. The FCC would also be able to impose penalties on businesses that provide facilities for online gambling.
Online gambling in the United States was not considered a priority until 2011. With the introduction of the Wire Act in 1961, there was some uncertainty about how the federal government would regulate it.
