Various legal issues surround illegal online gambling. Some states are concerned that the internet can be used to bring in illegal gambling into their jurisdictions. Others have raised questions about the legislative power of the Commerce Clause in connection to the gambling business.
One of the more contested issues is whether the Commerce Clause gives the federal government the authority to prosecute illegal Internet gambling. Some have argued that the commercial nature of the gambling business would suffice to satisfy the Commerce Clause. Other objections have been raised based on the free speech guarantees in the First Amendment. The Supreme Court has not decided these questions.
However, a number of federal criminal statutes do implicate illegal Internet gambling. These include the Wire Act, the Illegal Gambling Business Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions.
The law also prohibits gambling activities on contests, sporting events, and interstate commerce. These statutes also make it illegal to transmit bets, wagers, or other gaming activity over the internet. The Act prohibits gambling businesses from accepting financial instruments from persons who participate in illegal Internet bets. It also prohibits the transport of gambling devices such as slot machines and card games over the internet.
Although the federal government has taken the lead in enforcing the gambling laws, the state governments have also expressed concern that the internet could be used to bring in illegal gambling. The federal government has reinforced state law in some cases, while the state governments have struggled to enforce their own laws in others.