Federal Regulations of Online Gambling

Online Gambling

In the 1990s, online gambling became a popular trend. It appeared to be a way around government regulation. Operators could set up their operations in an offshore jurisdiction, and anyone with a computer and a credit card could find and wager on their favorite online casino games. This led the federal government and the Department of Justice to explore the regulation of online gambling.

Federal laws prohibit certain activities in online gambling. While most gambling activities are governed by state law, there are federal laws that can impede the operation of an online casino or sportsbook. For example, 31 U.S.C. 5362(B) prohibits players from using interstate facilities to engage in illegal gambling. Federal law also sets minimum age requirements, requires privacy protections for financial transactions, and requires sites to follow appropriate data security standards.

While many states have passed legislation that restricts online gambling, federal law still has many ambiguities. Although there are a number of exceptions to the Wire Act, many states have not yet enacted any specific rules. The Wire Act applies to betting and wagering operations that occur in the United States, and operators who violate it can be fined and even imprisoned.

Internet gambling is illegal under the Wire Act and 31 U.S.C. 5362(10). It involves placing, receiving, and transmitting bets via the Internet. This is also prohibited if it involves betting on a sporting event or a contest that is interstate in nature. Further, Internet gambling is also illegal under the Racketeer Influenced and Corrupt Organizations (RICO) Act.