The Federal Government’s Role in Regulating Online Gambling
Gambling is a complex activity that requires many considerations. It includes betting, wagering and the like, but also includes things like maintaining a roulette wheel, conducting a poker tournament and selling chances to win money. The process of gambling has evolved from the classic dice game to online casinos, virtual poker and sports bets. There are a number of federal laws governing the legality of various forms of gambling, though they vary in their scope and effectiveness.
First, there is the Wire Act, which prohibits illegal gambling on sporting events. While not as comprehensive as some state laws, it is still important. Some states allow for some forms of sports gambling, such as poker or horse racing betting, while others require a license to operate a betting shop.
Another federal law is the Unlawful Internet Gambling Enforcement Act, or UIGEA, which limits financial institutions from processing transactions to unlicensed gambling websites. The act also prohibits the use of wire communications for placing bets across state lines.
In addition to UIGEA, other federal law limits the sale of lottery tickets, gambling games and other commercial activities. Section 1956 of the federal statutes outlines three types of launder-related crimes: laundering to disguise, laundering with intent to promote illicit activity and laundering to evade taxes.
The law also provides for Racketeer Influenced and Corrupt Organizations (RICO) provisions that prohibit unlawful gambling business activity. This particular provision has come up in a number of cases.
There are several state laws that have been enacted that specifically address the issue of online gambling. West Virginia, for example, allows poker play, while Wyoming permits online sports betting. New Jersey and Pennsylvania have also made moves towards online gambling. However, there are several other forms of gambling that are still illegal.
As for federal statutes, the Professional and Amateur Sports Protection Act, which banned traditional sports betting in all states except Nevada, was struck down by the Supreme Court in 2018. Since then, a number of states have legalized their own versions of the practice. These include Pennsylvania, Maryland, Delaware, Mississippi and Iowa. And in January, Virginia went live with online sports betting.
Lastly, the federal government has also passed the Travel Act, which prohibits illegal gambling on interstate commerce. Though the Act itself is not as expansive as some of the state laws, its enforcement has prompted many arguments about the extent of its power. Additionally, the Department of Justice has issued an advisory opinion that suggests the Wire Act applies only to sports betting.
While the federal law on gambling may have been the first law to come down, the state laws that have followed have provided a much more thorough and comprehensive framework. However, the interstate aspect of these laws has impeded the federal government’s ability to enforce its policies. Moreover, the presence of this element has also frustrated the enforcement strategies of many states.
Finally, despite the legality of the act, there are still questions about the constitutionality of the statutes themselves. There have been a number of attacks based on the Commerce Clause, but these have yet to be successful.