Whether you’re gambling at a land-based casino or on the Internet, you have to know how to protect yourself from deceivers and fraudsters. Even though online gambling is a legal activity in most states, it can still be a gamble. A fraudster may lure you into a transaction, restrict your access to a website, or try to get you to purchase an item that you don’t really need.
The best way to avoid being taken in by a scam is to do your research on the websites you are considering. Look for sites that are transparent and honest about the games they are offering. Also, be wary of websites that mention seals of approval. In most cases, these websites are fronts for fraudulent websites. They will make claims about having approved seals, or they will ask you to contact support for clarification.
Using the Internet to conduct illegal gambling is also illegal under the Wire Act. This Act prohibits the conduct of “illegal gambling on contests, games of skill, lotteries, or any other form of gambling” as well as providing “facilities” for such activities. The law also provides that a person who receives bets or wagers on an Internet site can be prosecuted for money laundering.
There are also many other federal criminal statutes involved in this area of law. These include the Wire Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations Act. In addition, there are several state laws that regulate or prohibit online gambling. However, these laws are often not as well known as the federal statutes.
The CRS Report RS21984 contains an abridged version of the Unlawful Internet Gambling Enforcement Act (UIGEA), which is the government’s primary tool for combating illegal gambling on the Web. The abridged version includes citations to state gambling laws. It’s interesting that the UIGEA has no specific definition, but it does define a vague term that is used to cover all kinds of Internet gambling.
Other notable statutes are Section 1956, which makes gambling a crime if the intention is to conceal or disguise the operation of a lawful activity, and the Travel Act, which is another statute that criminalizes illegal gambling on the Web. In both cases, the commercial nature of the gambling industry appears to satisfy the Commerce Clause doubts.
The first legal Internet gambling venue for the general public was the Liechtenstein International Lottery. Since that time, there have been a number of successful attacks on the Commerce Clause based on the First Amendment’s guarantee of free speech.
Those attacks, while effective, have also had a limited effect. For example, in one case, federal marshals seized $3.2 million from Discovery Communications. The same agency accepted ads from Tropical Paradise, a Costa Rican casino operation.
The most obvious question that arises from these laws is whether the states have the power to prohibit them. In most cases, the answer is no. If a state does prohibit the Internet, the federal government does not have jurisdiction to enforce it. If it does, the state’s policy may be challenged by interstate or foreign elements that can frustrate enforcement.