Almost all countries in the European Union allow some form of online gambling. Some of these nations have recently introduced new laws to regulate internet gambling. Other countries, such as India, are silent on the subject.
In the United States, however, some forms of online gambling are illegal. This includes wagering on sporting events and contests through the Internet. This is primarily a matter of state law. However, the federal government has strengthened state laws in cases where the state does not have the authority to enforce the law. It is also possible to get into trouble for merely advertising a gambling operation. Those who do are considered aiding and abetting.
There are seven federal criminal statutes that may be implicated by illegal gambling on the Internet. These include the Wire Act, the Illegal Gambling Business Act, the Money Laundering Control Act, the Money Laundering Prevention Act, the Racketeer Influenced and Corrupt Organizations Act (RICO), and the Travel Act.
The United States Department of Justice recently announced that the Wire Act applies to all forms of Internet gambling. This has led to an increase in complaints about online gambling. However, critics say that the Justice Department’s move has no legal basis. It may actually be a political move to frustrate state enforcement policies.
Although a number of different bills have been introduced in the House and Senate since 2007, none have been passed. In 2007, Representative Barney Frank introduced a bill titled HR 2046, which is the acronym for the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. It would require gambling operators to obtain a license from the director of the Financial Crimes Enforcement Network. If the director found that a gambling operator’s activities were illegal, the operator would be subject to penalties. The bill would also add several requirements to the federal government’s existing laws. These would prohibit the government from issuing a license to any gambling operator that uses only cryptology to conduct its business.
The United States Department of Justice recently filed a criminal case against three of the largest online poker companies, charging them with money laundering, UIGEA violations, and violations of 18 U.S.C. 1955. The case, United States v. K23 Group Financial Services, is a criminal case. The founder of the companies was sentenced to two years probation and was ordered to pay a $25,000 fine.
There are a number of ways to make money from online gambling, including tournament fees, tournament rake, “rake,” and “rake on” fees. Some companies will offer betting markets on horse races, as well. Those that do offer these betting markets are usually betting exchanges.
The federal government’s ability to regulate and enforce gambling laws has been challenged on constitutional grounds. Some have argued that the federal government is unable to effectively enforce gambling laws because of the Commerce Clause. Others have argued that the due process clause may be at odds with the government’s ability to regulate and enforce gambling.