Using the Internet for gambling activities is illegal under federal law. The definition of unlawful Internet gambling is found in Section 5362 of the federal criminal code. It defines illegal Internet gambling as the transmitting, receiving, or participating in bets or wagers. In addition, it includes using or receiving any financial instrument that is derived from the conduct of an unlawful Internet bet.
The federal government has seized millions of dollars in revenue from companies alleged to have violated the UIGEA. These companies include the K23 Group, which provides poker games to Internet users. In addition to the charge of UIGEA violations, K23 Group is alleged to have engaged in money laundering. In a separate case, the U.S. Marshals seized $3.2 million from Discovery Communications.
A number of state officials have expressed concern that the Internet may be used to transport illegal gambling into their jurisdictions. In fact, in the past decade, almost three thousand websites have provided at least one type of gambling activity. Some states have banned or restrict the use of the Internet for gambling. Others have permitted or legalized online gambling, but have strict regulations.
The United States has six states that allow for the operation of online casinos. These states are New Jersey, Pennsylvania, Illinois, Nevada, Delaware, and West Virginia. However, these laws do not cover the United Kingdom. A few European countries have banned gambling. Currently, other European countries have legalized it.
Other forms of gambling are sports betting, bookmaking, and pool-selling. Some forms of gambling are only available in specific locations, such as casinos, lotteries, or slot machines. It is important to explore the legality of gambling in your jurisdiction before launching a business, to ensure that your business is legal.
While state gambling laws are primarily matters of state law, there are several federal criminal statutes that are implicated by illegal Internet gambling. The primary crimes involved are: promoting gambling, laundering with the intent to promote illicit activity, and launder to conceal.
In addition, the First Amendment guarantees free speech, but limited First Amendment protections prevent certain types of criminal activity from facilitating speech. In some cases, a crime promoting speech is not a free speech offense, such as criminal fraud or tampering with a government record. In these situations, the due process arguments that apply in state courts are often ineffective. The Commerce Clause has been raised as a potential source of legislative power in these cases. Although the commercial nature of the gambling business has been seen to satisfy these concerns, questions still remain.
Another issue is the impact of the Lopez Amendment. This provision is based on Congressional findings that the commercial nature of the gambling industry will have a significant impact on interstate commerce. In addition to regulating the commercial activity of gambling, the Lopez Amendment also contains elements to address low level gambling crimes. In other words, the Amendment seeks to prevent criminal gambling from attracting the attention of the general public.