Illegal online gambling can be prosecuted under federal criminal statutes. However, gambling laws are mostly state-specific and federal laws reinforce and enforce state laws. However, state officials are concerned that the Internet could be used to bring illegal gambling into their jurisdictions. There are various ways to combat the problem. The main concern is to ensure that the gambling industry is legitimate and not harmful to the public.
Federal laws regulating Internet gambling may be subject to litigation. In addition to prosecutions, there have also been several successful constitutional challenges. Several attacks have relied on the Commerce Clause, the First Amendment’s guarantee of free speech, and the Due Process Clause. However, these arguments have met with mixed results. Commerce Clause doubts are satisfied by the commercial nature of gambling; free speech objections are weakened by the limited First Amendment protection against crime facilitated by speech. Furthermore, due process arguments are weakened when financial transactions are involved.
Most states allow online gambling. However, a few states restrict it. Although gambling is legal on the federal level, each state has the right to regulate its activities. Some states allow online gambling in certain situations, including poker and sports betting. Others have limited or no restrictions or requirements. The list of states allowing online gambling is long. Each state regulates the industry differently, so there is a great deal of variation from state to state. Nevertheless, twenty states permit residents to gamble online and to bet on sports events.
New Jersey legalized online casinos in 2013, making it the first U.S. state to legalize the industry. Today, it has over 20 online casinos, including top-tier brands. The New Jersey Division of Gaming Enforcement oversees the industry. Pennsylvania recently joined the party with two online casinos, expanding its online casino landscape to rival that of New Jersey.
However, illegal online gambling is still possible. According to 31 U.S.C. 5362(10), internet gambling is a criminal activity if it involves gambling in an illegal manner, including betting on sporting events, contests, or any other kind of lottery. Additionally, the Wire Act prohibits the use of interstate commerce to conduct gambling business activities.