The online gambling industry is booming in the United States, with many Americans having access to the internet to play a wide variety of games. Online gambling includes sports betting, casinos, poker, and virtual poker. Some states have legalized these activities, while others have not. However, state officials are concerned about the potential for illegal activities. Several federal statutes have been introduced to regulate gambling.
Section 1956 of the United States Criminal Code defines several crimes related to illegal Internet gambling. These crimes include laundering, evading taxes, and concealing or promoting illicit activity. In order to avoid prosecution, internet operators may establish their businesses in an offshore jurisdiction. This is a serious concern for state officials, since they worry that the Internet can be used to spread illegal gambling within their own borders.
Other federal statutes include the Wire Act, the Travel Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations (RICO) provisions. Although some of these statutes are specific to gambling, some of them are general laws that apply to all forms of gambling.
Despite federal law banning certain forms of sports betting, a number of states have allowed the activity. New York, Illinois, and Maryland have all permitted sportsbook operations, while Connecticut has had an online casino since 2006. Massachusetts and Ohio will allow sports betting in early 2019. It is estimated that more than half of the U.S. population will be able to wager on sports in the near future.
In addition to the laws in place for state residents, the federal government has imposed regulations for gambling activities on Native American land. Congress has regulated the types of gambling allowed on Indian reservations and enacted legislation to regulate the transport of lottery tickets across state lines. Many tribal casinos have agreements with major online casino operators. On the other hand, a tribal casino is not legally enforceable in a state that has not recognized the tribe’s right to regulate the tribe’s territory.
While federal and state laws dictate which activities are legal and which are not, some states have imposed specific age requirements for their respective gambling operations. Some states have a statewide minimum age for all gaming, while other states have a specific age limit for all types of gaming.
In December 2002, the General Accounting Office published an overview of issues related to online gambling. The report included citations to state gambling laws and the text of the relevant federal statutes. A CRS Report RS21984 is now available in abridged form. Among other issues, it cites to the Commerce Clause and the First Amendment.
The Department of Justice is pursuing criminal charges against Internet poker operators, as well as a number of individuals, for violations of 18 U.S.C. 1955, which prohibits money laundering. There is also the Unlawful Internet Gambling Enforcement Act, or UIGEA. This is an effort to prevent the facilitation of illegal Internet gambling, and the UIGEA would require Internet gaming operators to obtain a license and pay a tax.
