Gambling is the act of wagering something of value on a random event, or an attempt to win that something of value. Gambling is typically restricted to states that have legalized the activity, although in the past few years a number of states have adopted some form of online gambling. Although the United States is not known for its laissez faire approach to gambling laws, the federal government does have a hand in regulating the industry.
The Commerce Clause of the Constitution grants Congress the power to regulate interstate trade. This power has been interpreted as the basis for many of the laws governing gambling and other forms of commerce. However, these same laws have been challenged in courts on constitutional grounds. In addition, a number of state officials have expressed their concern that online gambling might bring illegal gambling into their jurisdiction.
To enforce these laws, the Department of Justice has seized assets from people and businesses engaged in illegal Internet gambling. Most regulated sites offer bank transfers, though not all. Banks often charge a flat fee for wire transfers. It can be cumbersome to use the Internet to transfer money from one place to another. Physical checks also can be used. These require higher minimum withdrawal amounts than the wire transfer method.
There is a large debate over whether or not the federal government can compel states to adopt federal legislation, even in the context of a non-interstate transaction. Some argue that a law prohibiting the transportation of lottery tickets between states does not have a constitutionally adequate basis. Others have suggested that because the law is unconstitutional, it cannot be enforced.
Similarly, there is some controversy over the Department of Justice’s assertion that all internet gambling in the United States is illegal. While the Wire Act is the primary statute implicated by illegal internet gambling, several other criminal statutes also are involved.
For example, the UIGEA, or Unlawful Internet Gambling Enforcement Act, includes a number of factors to weed out low-level gambling cases. One such factor is the use of the smallest possible amount of information for a secure payment transaction. Another factor is the sexiness of the smallest possible financial instrument.
Among the laws pertaining to internet gambling, the most notable is the Travel Act, which bans the interstate transport of any “illegally obtained or illegally acquired lottery ticket or any other instrument which is unlawful to possess or possesses.” Several federal criminal statutes pertaining to gambling also have been prosecuted. Specifically, Section 1956 of the Illegal Gambling Business Act creates several different crimes related to laundering. Those crimes include the evasion of taxes, the promotion of illicit activities, and the concealment of the identity of the launderer.
Another federal law is the Racketeer Influenced and Corrupt Organizations (RICO) Act, which prohibits illegal gambling business activities. Generally, an illegal gambling business is one that operates for more than thirty days and generates more than $2,000 in gross revenue on a single day. As a result, the owner of an illegal gambling operation can be imprisoned for up to five years.