How Online Gambling Is Regulated
Online gambling has become quite popular in recent years. Whether you are an amateur gambler or a pro, there are a wide range of options to choose from. You can choose from the traditional casino games, such as blackjack, to more modern offerings, like poker. These include both live dealer and virtual versions. To make sure you’re getting the best deal, you’ll want to look for a reputable site.
Generally, gambling is governed by state laws, but the federal government can also impose a ban. Illegal Internet gambling, for example, implicates seven federal criminal statutes. The Wire Act, the Illegal Gambling Business Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions all prohibit illegal gambling business activities.
A number of states are concerned that the online world could be used to facilitate illegal gambling in their jurisdictions. This worry has led to a host of court cases and Congressional findings on the subject. Some have even raised due process concerns regarding regulation of activities conducted partially outside of the United States. Other issues are broader in scope, such as the potential of internet gambling to facilitate the dissemination of counterfeit currency.
In December 2002, the General Accounting Office released a report entitled Internet Gambling: Overview of Issues. This report is a sweeping survey of all major issues associated with online gambling, including the potential for the internet to act as a conduit for illegal gambling. Among other things, the report explores the best ways to prevent the spread of fraudulent currency, the most important elements in a gambling site’s security and privacy, and the advantages and disadvantages of using an electronic wallet.
Several states have also enacted legislation to combat the use of the Internet to facilitate gambling, including the Commonwealth of Puerto Rico and the District of Columbia. Both enacted laws, however, have been challenged on constitutional grounds.
Similarly, a number of court cases have questioned the validity of federal law regulating the Internet. The Commerce Clause has been questioned, largely on the basis of whether the legislature has authority to regulate interstate commerce. Although the commercial nature of the gambling industry is not in dispute, the argument that a law regulating it is an effective exercise of congressional authority has not been accepted. However, there are still a number of legal arguments that support the assertion.
One of the most interesting of these is a recent Supreme Court case. Known as United States v. K23 Group Financial Services, the case involved an online poker company that was charged with violating the UIGEA, or Unlawful Internet Gambling Enforcement Act.
The UIGEA prohibits any person from accepting financial instruments from a person engaged in illegal Internet bets. It also mandates the location verification of any person engaging in online gambling, and includes appropriate data security standards. Lastly, it requires that any Internet provider ensure that its customers are in compliance with applicable state and local gambling laws.
Despite these federal enactments, the United States has a long way to go in defining its position on online gambling. Nevertheless, the internet is here to stay, and its influence on the world of gambling is likely to grow over the coming years.