The Federal and State Laws Governing Online Gambling

online gambling

Online gambling is an online activity that allows people to play casino games, bet on sports, and even gamble on fantasy sports. Gambling can be done on a state level or a federal level. Depending on the laws in the jurisdiction, some activities may be legal and others illegal. Some of the most common types of online gambling include casinos, sports betting, and virtual poker. In addition, some states have passed legislation to regulate internet wagering.

There are seven federal criminal statutes that are implicated by the practice of online gambling. These statutes are the Wire Act, the Money Laundering and Financial Fraud Act, the Illegal Gambling Business Act, the Travel Act, the Money Laundering Offenses Act, the Racketeer Influenced and Corrupt Organizations (RICO) provisions, and the False Claims Act.

The Wire Act prohibits the unlawful transmission of bets across state lines. While the Wire Act is not directly applicable to digital wagering, it provides a general framework for the regulation of Internet gambling. It does not apply to financial transactions, telecommunications services, or Internet gambling businesses that are not located in the United States.

The Money Laundering and Financial Fraud Act is a more complex federal criminal law. It creates several different crimes, including laundering with the intent to promote illicit activity, concealing the proceeds of illegal activities, and evading taxes. It also provides the most obvious reason for prosecuting illegal Internet gambling: money laundering.

On a state level, some states have adopted the Public Gambling Act, 1867, which was designed to prohibit gambling in the state. A few states, such as Hawaii, have religious or cultural beliefs that prevent the practice. Others, like New Jersey, allow residents to wager on sports or poker sites. But, most of the states are largely anti-gambling.

Several states, such as Wisconsin and Idaho, have banned gambling entirely. However, the presence of an interstate element frustrates enforcement policies for state laws. This is because the underlying financial transaction takes place in the United States. Therefore, due process arguments are undermined. For example, in one case, an owner and manager were arrested for violating state gambling laws. And in another, 12 customers were charged for gambling.

The other notable legal and technical achievement is the Lawful Internet Gaming Act, which was adopted by the State of Michigan. Among other things, it permits interactive wagering on sports, allows players to participate in online lotteries, and positions the state as an early player in the world of mobile sports betting.

The False Claims Act is also an important piece of online gambling law. Not only does it provide a framework for punishing fraud, it also protects taxpayers by providing an exemption from the Federal False Claims Act for legitimate charitable donations. Many state lawmakers have expressed concerns that Internet gambling could help bring illegal gambling into their states.

Finally, the Travel Act prohibits the conduct of illegal gambling over interstate lines. This includes casinos, sportsbooks, and other gambling sites. If the facilities are leased or furnished by a common carrier, the FCC has the power to stop the lease.