Online Gambling and the Federal Government

online gambling

Online gambling has come a long way in the last decade. In 1998, just fifteen sites offered gaming opportunities, and by 2008, the number had grown to over two hundred. By that time, online gambling revenues had reached more than $830 million.

There are many forms of online gambling, from virtual poker to sports betting. While some forms are legal and safe, others are illegal. For example, there is a bill in Congress to ban online gambling. However, the legality of gambling is largely a matter of state law, and most US states have laws on the books that restrict or prohibit online gambling.

While no state has completely prohibited online gambling, many state officials are concerned that the Internet could be used to incite illegal gambling in their jurisdictions. In that regard, the Federal Government has a strong interest in enforcing its laws. For instance, the Wire Act has a broader application than the statute might suggest. The legislation defines unlawful Internet gambling as “using a computer or an electronic device to transmit bets or wagers or otherwise receive such bets or wagers, or to conceal such bets or wagers.”

The Internet Gambling Prohibition Act, a bill introduced in the US Senate in 1999, would have effectively banned all forms of online gambling. However, it was later found to be unconstitutional. In the ensuing years, various attempts to pass similar bills have been introduced in the House of Representatives. These bills include the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2046), which would require licensing of internet gambling facilities by the director of the Financial Crimes Enforcement Network. In addition to imposing new regulations on gambling, it would also give federal agencies more power to investigate and prosecute internet gaming operations.

The federal government’s recent efforts to enforce its gambling laws have been met with a lot of criticism. One of the chief complaints is that it does not provide sufficient legal justification for its actions. Specifically, the law does not offer enough clarity regarding what constitutes an ‘illegal’ Internet gambling operation, as well as the amount of time and effort required for federal agents to take action. Other opponents say the law is a pretext for a bigger problem – the proliferation of online casinos, which have grown to become more than a quarter of the overall gambling market.

While federal law has reinforced state law in some cases, it has also stymied the development of more innovative online gaming legislation. This is not surprising. As more and more states legalize gambling, the ability to regulate online games will depend on the state. The UIGEA will likely remain the primary avenue for enforcing state law.

While it has taken the federal government a while to impose new regulatory and legislative measures, the market for online gambling is set to continue growing, especially in light of the WTO’s announcement last month that it has ruled against a proposal to impose new restrictions on online gaming.