Online gambling is a wide range of activities involving playing games of chance and skill for money, from casinos and poker to sports betting and bingo. These are available on any computer, mobile device, or other Internet-connected device. Those who gamble on the Internet may use any of several methods, such as sending funds to the site via an electronic check, using credit cards or electronic transfer, or using a debit card.
Internet gambling has been a topic of interest and concern among officials from state governments and the federal government. In addition to a plethora of legal and regulatory issues, state officials are concerned about the impact of the Internet on their jurisdictions and the ability of Internet-based operators to bring in illegal activity. There are also some constitutional concerns, as several statutes are implicated in the activity.
The Federal Communications Commission has the authority to regulate communications and common carriers. Therefore, it can decide whether to discontinue providing facilities or maintaining them. Similarly, the Federal Trade Commission, the FTC, can impose penalties on businesses deemed to be in violation of federal or state regulations.
For example, the Travel Act is a federal law that applies to players who utilize interstate facilities for unlawful activities. Its application to Internet casinos is a little more complicated, but it seems clear that Internet gambling is regulated. Several cases have affirmed this rule, including United States v. Grey, United States v. Heacock, and United States v. O’Brien.
Another statute is Section 1956. This is a provision in the Unlawful Internet Gambling Enforcement Act that creates a number of distinct crimes. Among other things, it includes laundering, concealing, and tax evasion. It also creates laundering for international purposes.
While the UIGEA is a federal law, state laws are often cited as the basis for challenges to its enforcement. For instance, the Tenth Circuit case United States v. Mick involved bartenders and managers of video poker establishments. Also, the Fifth Circuit case United States v. Heacock included waitresses who served drinks. However, these arguments have not produced much success.
Another issue is the First Amendment. While the Commerce Clause provides a legal foundation for the legality of online gambling, the Commerce Clause does not provide for the same protection against due process violations. Nevertheless, the commercial nature of the gambling business may be a sufficient answer to these objections.
Additionally, there are also some constitutional objections to the enforcement of the federal gambling laws. Specifically, a challenge to the enforcement of Section 1956 has been raised, because it enables criminal activity to disguise itself as a legitimate business. Moreover, there are some questions about the proper legislative power under the Commerce Clause. Some state officials have expressed concerns that the Internet could be used to illegally bring gambling into their states.
Finally, there are some constitutional issues with the enforcement of the Federal Trade Commission’s jurisdiction over the Internet. Essentially, the FTC’s authority over commerce is based on the Due Process Clause, but not on the Commerce Clause.