The Legality of Online Gambling in the United States
Online gambling has become a hot topic in the United States. More and more Americans are placing bets on sports and playing their favorite casino games online. Many state governments have been hesitant to legalize online gambling, fearing that the internet could be used to facilitate illegal betting. However, there are a number of states that have recently legalized online sports betting and casinos. In fact, more than half of the country will soon be able to place bets on sports in their own backyards. In addition to sports, there are also casinos and virtual poker to consider.
While the legality of online gambling is largely a matter of state law, federal law can reinforce state law. The United States has several criminal statutes related to the operation of unlawful Internet betting. Some of these include the UIGEA, which prohibits financial transaction providers from accepting financial instruments from persons engaged in unlawful Internet gambling. Additionally, the Travel Act provides for the imposition of a federal tax on sports bets. In some cases, these statutes have been challenged on constitutional grounds.
While the issue of whether or not the Commerce Clause protects gambling is still debated, there is little dispute that a commercial nature of the gambling business is sufficient to satisfy the Commerce Clause. As a result, the First Amendment and the Due Process Clause do not appear to be at risk. However, questions have arisen regarding the proper enforcement of state laws when interstate or foreign elements complicate the law.
In June of this year, the United States Court of Appeals for the Fourth Circuit issued a ruling determining that there is no federal criminal liability for Internet gambling. In the case of United States v. Heacock, a group of five individuals placed bets on sports events over the course of thirty days, grossing about $2,000. The Defendants, including bartenders and managers of establishments with video poker machines, were convicted of unlawful Internet gambling.
The Supreme Court affirmed the ruling in the case of United States v. Nicolaou. This case involved a group of five people who placed wagers on baseball and football games. The total revenues for the five individuals was $2,000 per day. The Defendants were convicted under Section 1956 of the Federal Criminal Code. This section defines several different crimes, including laundering for concealing, evading taxes, and promoting illicit activity.
In the United States, there are numerous cases that have been filed against Internet poker operators and betting sites. These cases have been tried on constitutional grounds, and have generally been unsuccessful. These cases are generally based on the Due Process Clause, which requires due process to be afforded to citizens, and the Commerce Clause, which protects the free flow of goods and services.
Illinois and Michigan have recently begun to offer their residents the opportunity to place wagers on sports. However, most of these bets are not for collegiate events. In addition, wagers on non-sports events are prohibited.