Despite the fact that online gambling is now a common form of entertainment, there are many questions about its legality. These questions are often raised on constitutional grounds. In particular, the Commerce Clause has been questioned. In addition, a challenge to the government’s power under the Constitution to legislate on these matters has also been posed.
The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibits the transfer of money to internet gambling sites. It also includes provisions preventing financial institutions from accepting funds from illegal Internet bets. These restrictions were largely enforced by state law in cases. However, there are elements of interstate and foreign elements that can frustrate state enforcement policies.
There are several federal criminal statutes that are implicated by illegal Internet gambling. These include the Wire Act, which prohibits illegal gambling on contests and sporting events; the federal law on lottery, sports book, and casino betting; the federal law on gambling in interstate and foreign commerce; and the Racketeer Influenced and Corrupt Organizations (RICO) provisions.
During the Fourth Circuit case, United States v. Nicolaou, the defendants had gross revenues of two thousand dollars from five individuals during a thirty-day period. The government seized a substantial amount of the defendants’ funds. In response, the defendants agreed to pay a $4.2 million fine and launch a public-service campaign.
The Department of Justice has attempted to estimate the size of the online gambling industry. The National Gambling Impact Study Commission has estimated that online gambling revenues were approaching $2 billion in 2000.