Among the many issues facing the federal government in the Internet age is the issue of illegal Internet gambling. This topic has been the subject of some debate in the federal courts, and the issues have led to some constitutional debates. There are three main legal challenges to the enforcement of federal gambling laws: the Commerce Clause, the RICO statute, and the First Amendment. While some questions have been raised about the extent of the Commerce Clause’s power to regulate gambling, others have been raised about the First Amendment’s limited protection of crime facilitating speech.
In the past few years, the federal government has taken some action in the form of criminal indictments and civil forfeitures. This includes a case against K23 Group Financial Services, an Internet poker operator, for violations of 18 U.S.C. 1955. Similarly, the federal marshals seized a total of $3.2 million from Discovery Communications for accepting ads from a Costa Rican casino operation. The case has also sparked interest among state officials, who have expressed concerns about the potential for the Internet to serve as a conduit for illegal gambling to reach their jurisdictions.
The RICO statute and the Travel Act are also relevant to the discussion of illegal Internet gambling. The RICO statute prohibits the conduct of illegal gambling business activities, while the Travel Act provides for the prohibition of illegal gambling on interstate commerce. The CRS Report RS21984 provides a brief synopsis of the legal issues surrounding illegal Internet gambling. The report also contains a series of citations to state gambling laws. The CRS Report is available in abridged form.
The First Amendment also plays a role in the debate over illegal Internet gambling, but not as a means to enforce federal law. In particular, the Commerce Clause has been a subject of debate, and the question of whether it is constitutional to prohibit gambling on the Internet has been raised. Some questions have been raised about whether the Commerce Clause authorizes the government to prohibit Internet gambling based on the notion that such activities are a commercial endeavor. In particular, questions have been raised about whether the government has the authority to prohibit the use of Internet gambling to facilitate interstate financial transactions.
In addition to the above-mentioned CRS Report, the UIGEA, and the Travel Act, the federal government has also taken the more direct approach to regulating illegal Internet gambling. It has enacted a number of laws that prevent illegal Internet gambling and other forms of financial fraud. The UIGEA, for instance, prohibits financial institutions from accepting financial instruments from an illegal Internet gambling operation. The Travel Act, on the other hand, prohibits the operation of gambling on sporting events in interstate commerce. Similarly, the Wire Act is an anti-illegal gambling statute. The simplest way to summarize the legal framework of the law is to state that the most important parts of the laws are state-based, and that federal law provides a supplemental reinforcement to state law.
