Several countries around the world have laws that prohibit gambling. Gambling refers to any activity that involves wagering or placing bets on a chance. These activities include sports betting, lotteries, poker and other games of chance. However, some forms of gambling are legal in some countries, including the United States.
The Wire Act and the Travel Act are two federal statutes that prohibit illegal gambling on sporting events and interstate commerce. Both statutes also prohibit the use of electronic transmissions for gambling purposes. The Illegal Gambling Business Act and the Racketeer Influenced and Corrupt Organizations (RICO) Acts are other federal laws that criminalize gambling businesses. The Federal Communications Commission has jurisdiction over common carriers, and it can suspend the furnishing of facilities and discontinue the leasing of facilities to gambling businesses.
In addition, the Department of Justice has stated that the Wire Act applies to all forms of Internet gambling. This has caused many questions about the legality of prosecuting illegal Internet gambling. The law has also been challenged on constitutional grounds. The Fifth Amendment, the First Amendment, and the Commerce Clause have all been asserted as reasons for opposing prosecutions. However, these attacks have produced little success.
The First Amendment provides for free speech, but there are limits on how much of that freedom may be infringed by law enforcement actions. This is especially true for cases where financial transactions are involved. The Commerce Clause has been cited to argue that federal laws are necessary to enforce federal statutes. However, state officials have raised concerns that the internet could be used to bring illegal gambling into their jurisdictions.
A number of bills have been introduced in the House of Representatives since 2007. One, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2046), was introduced by Rep. Barney Frank in April 2007. It would amend the Unlawful Internet Gambling Enforcement Act and require internet gambling facilities to be licensed by the director of the Financial Crimes Enforcement Network (FinCEN). It would also provide that any advertisement pertaining to gambling on the Internet is prohibited in Washington, D.C. and Washington state.
In addition, the Lopez Amendment was enacted by Congress in 2003. The Lopez Amendment provides for elements to be used to identify low-level gambling cases. It also has Congressional findings on the effect of gambling on interstate commerce. These elements, however, do not seem to satisfy the First Amendment objections to criminalizing gambling.
The United States Court of Appeals for the Fifth, Seventh, and Tenth Circuits have all ruled in favor of the United States in cases involving gambling. However, in the Sixth Circuit, United States v. Mick involved bartenders and managers of establishments that had video poker machines. The Fifth Circuit also ruled in favor of the United States in United States v. O’Brien and United States v. Grey.
The Fifth Circuit also ruled in favor of a federal indictment in a case involving a Nevada-based company that provided sports betting to its customers. The case involved a $4.2 million fine and a $3 million public-service campaign.