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Online gambling is a growing industry in the United States, with more and more Americans able to wager on their favorite casino games. These include virtual poker, casinos, sports betting, and lotteries. While most types of simple gambling are illegal in many states, the legalization of online sports betting has been particularly popular, with nearly half the states now offering such options. The legalization of online gambling in Ohio is imminent, while Massachusetts will start allowing such betting in early 2023.
Almost every state in the country has a gambling law of some sort, although the exact scope and number of state-sponsored sites varies considerably. In addition to gambling itself, most states also have laws against the use of Internet casinos to facilitate unlawful gambling. However, some jurisdictions have taken an exception to the rule. For instance, Iowa’s law only allows for the betting of sporting events, while Connecticut has three sportsbooks but no commercial casinos.
Gambling is a complex subject, encompassing everything from bookmaking to lotteries to conducting contests to selling chances. As with other forms of law, the federal government’s regulations on it are largely enforced on state-level, but in some cases the issue has been challenged on constitutional grounds. Those attacks have not proved successful, however.
For example, the Wire Act, which prohibits all forms of gambling on or around sporting events, was cited in a recent United States v. K23 Group Financial Services case, which charged a group of Internet poker operators with violating 18 U.S.C. 1955, which imposes criminal penalties on money laundering, telecommunications services, and illegal Internet gambling.
A second legal issue affecting gambling is the Racketeer Influenced and Corrupt Organizations (RICO) provisions, which prohibits illegal gambling business activities. Another federal statute implicated by Internet gambling is the Illegal Gambling Business Act, which is the primary source of legislation against illegal online gambling. Both laws were enacted to prevent illegal Internet gambling, but have been criticized on constitutional grounds, in particular, the Due Process Clause.
In addition to the criminal law, there is also a regulatory framework for Internet gambling, which includes the Unlawful Internet Gambling Enforcement Act (UIGEA), which was enacted in June 2011. UIGEA is designed to stop the proliferation of low-level gambling businesses, such as poker, and weed out illegal activity. It contains a set of criteria to identify low-level gambling cases, and Congressional findings on the impact of such activity on interstate commerce.
Some other federal laws implicated by Internet gambling are the Interstate Commerce Act, the Travel Act, and the Wire Act. Each of these has been challenged on constitutional grounds, but the arguments have so far proved fruitless. UIGEA, on the other hand, has been used to bolster the enforcement of state-level laws in some instances.
Indiana is one of the few states with an upcoming online poker launch. Although most lawmakers have little interest in advancing such laws, the Indiana Gaming Commission is currently granting licenses to gaming operators for operation. One major advantage to the Indiana approach is that the law does not allow for eSports betting.