There has been a lot of discussion about the potential for legal online gambling. In the past two decades, there have been several developments, including the advent of the Internet and the rise of the “casino.” Online casinos, poker rooms, and sportsbooks have come into existence in a number of states. But the extent to which these activities are permitted and regulated depends on state and federal laws. Some states have more restrictive laws than others, and each has its own unique set of rules.
While most Americans can participate in gambling in their own communities, Internet-based gambling threatens to bring it directly into their homes. As such, state officials have expressed their concern that the Internet can serve as a vehicle for illegal gambling to enter their jurisdictions. The United States government has taken steps to prevent such activity. These efforts include legislation that limits the types of games available and regulates the methods of conducting such activities.
Congress has used its power under the Commerce Clause to control the use of the Internet to conduct gambling. However, these measures have not been successful. Several attacks on the government’s authority have been made based on the First Amendment, the Commerce Clause, and the Due Process Clause.
Laws regulating the Internet have not been primarily enforced by state governments, in part due to the uncertainty of the extent to which the federal government can preempt states. Nevertheless, several bills have been introduced to soften the federal Internet gambling law. One proposed bill would limit the scope of the Unlawful Internet Gambling Enforcement Act (UIGEA), which has been used to prohibit Internet gambling businesses from taking bets from consumers in the U.S. Other proposals would regulate the commercial activity of such businesses and tax them.
As of the present, most state legislatures have not considered online gambling particularly important. Those who do consider the issue have generally taken a conservative approach. Nonetheless, the issue has generated a great deal of interest, and Congress has explored its potential. For example, in December 2002, the U.S. House of Representatives Committee on the Judiciary held a hearing on online wagering policies.
The federal government has also used its powers under the Wire Act to regulate the use of the Internet by gambling establishments. This statute provides that an act is unlawful if it is transmitted over the Internet without a legitimate purpose. Under the law, an operator can be fined and imprisoned. An exception to the law is when the act is legal in both the source and the destination locations. However, this exception is not always applicable, and it does not apply when an act is merely legal in the source location.
The federal government has also taken action to regulate the sale of lottery tickets between states. It has prohibited the transportation of such tickets between states. Similarly, it has enacted laws to prohibit gambling on Indian reservations within state borders. However, it has not yet prohibited the sale of such lottery tickets on other Native American territories.