Whether you’re a sports fan, an online poker player, or both, you’ve probably heard about the recent legalization of online gambling. This has spurred debate on whether the new law is good for gambling or bad for consumers. However, the debate over the legality of gambling online has taken a backseat to a much larger debate: the legality of sports betting online.
In general, the laws governing gambling are tough. There is no constitutional right to privacy while gambling, and state officials have expressed concern that the internet could be used to bring illegal gambling into their jurisdictions.
There are a number of legal defenses for gambling. One is that the law does not require a gambling establishment to be located in a particular state. The Wire Act prohibits gambling on sporting events, and the Illegal Gambling Business Act imposes penalties for operating an illegal gambling business. There is also the Racketeer Influenced and Corrupt Organizations (RICO) statute, which prohibits the conduct of an illegal gambling business.
There are also many federal statutes governing online gambling. These include the following: 18 U.S.C. 1956, which makes illegal gambling business activity a crime; 31 U.S.C. 5362, which defines unlawful Internet gambling; and the Wire Act, which prohibits the unlawful gambling of any sporting event. The Act also provides the right of the Attorney General to prevent acceptance of any financial instrument derived from an illegal Internet bet.
However, the law has faced criticism on constitutional grounds. Specifically, there are questions about whether the Commerce Clause authorizes federal enforcement of the law. In fact, the Congressional Research Service (CRS) has published a report on the legality of online gambling. This CRS report, RS21984 (which can be abridged if you prefer) includes a list of statutes and citations to state gambling laws.