What Is Online Gambling?
When it comes to online gambling, there are many different types of games and sites available. These include casinos, poker, sports betting, and bingo. While there are a number of differences, the overall concept remains the same. Players can wager on the outcome of a match, or on the total amount of points that will be scored. The graphics on these sites have also gotten more creative over time.
While the concept of online gambling has been around for a while, it only recently became a viable option for consumers. Since the late 1990s, online gambling has increased dramatically. In fact, by the end of 2005, the online gambling industry was estimated to be worth over $21 billion.
Despite its popularity, illegal internet gambling still remains a federal crime. It is unlawful under the Wire Act and the Illegal Gambling Business Act (IGBA). IGBA’s definition of unlawful Internet gambling includes sending, receiving, or otherwise transmitting bets and gambling related information over the internet. However, the Act’s definition does exclude financial transaction providers.
In November 2004, the United States Department of Justice issued a warning to PayPal that it might be prosecuted for accepting payments from customers who placed bets on illegal Internet games. Similarly, in July 2007, federal prosecutors warned Discovery Communications that it could be prosecuted for running ads for the Internet gambling site Tropical Paradise.
This law is aimed at preventing the spread of illegal Internet gambling. But it is not a complete solution to the problem. Additionally, it has been criticized for its limited First Amendment protections. Also, some state officials have expressed concern that the internet could be used to transport illegal gambling into their jurisdictions.
Nonetheless, the UIGEA has helped keep the Internet’s illicit gambling activities in check. The law imposes a number of penalties on operators of illegal Internet games, including the prohibition of accepting financial instruments from bets placed via the Internet. Likewise, it requires that Internet businesses adhere to certain security standards. Finally, it sets forth a Congressional report detailing the impact of the law on interstate commerce.
While the UIGEA and its predecessors have been effective in addressing the growing threat of illegal Internet gaming, they have raised constitutional questions. Many of these concerns revolve around the Commerce Clause’s ability to regulate Internet gambling.
However, attacks on this statute have remained limited. One case in particular, United States v. Grey, involved bartenders and managers of establishments with video poker machines. Other cases based on the Commerce Clause have not fared as well.
For example, a case in the Tenth Circuit, United States v. O’Brien, found the act of sending a bet to a remote location to be a “moot” as defined by the aforementioned CRS Report RS21984 – although the bet’s value was not included in the court’s ruling.
Another question of constitutional magnitude concerns whether the UIGEA violates the First Amendment. This question is particularly important for gambling websites because the commercial nature of the activity seems to address the Commerce Clause’s doubts.