Generally, state law regulates gambling, while federal law only reinforces state law in cases where it is necessary or warranted. However, state officials have expressed concern that the internet could be used to facilitate the transportation of illegal gambling to their jurisdictions. In response, federal prosecutors warned PayPal it could face prosecution for its role in facilitating the flow of money to illegal gambling operators.
The UIGEA prohibits financial transactions involving illegal Internet bets. In addition, Racketeer Influenced and Corrupt Organizations (RICO) provisions prohibit illegal gambling business activities. Likewise, the Illegal Gambling Business Act prohibits the facilitation of the conduct of gambling. In other words, it is illegal to operate an Internet poker room.
The UIGEA is only one of several federal criminal statutes implicated by illegal Internet gambling. In fact, there are at least seven statutes that have been used to prosecute Internet gamblers. Some of these statutes are ostensibly old, while others are brand new.
It is also a good idea to consider the effects of interstate or foreign elements on state enforcement policies. This is especially true of Internet gambling, where interstate or foreign players may be attracted to Internet gambling sites and thus make it harder for state enforcement authorities to snare them. In particular, this is true of Internet poker, where players from different states and countries can play in the same casino.
However, the Internet gambling industry has a few kinks to work out. For instance, there are still questions about whether the federal government has jurisdiction over Internet poker sites located in states that are not themselves in the U.S. Also, the United States Marshals Service recently seized $3.2 million from Discovery Communications, which accepted ads from Tropical Paradise. And, it is not uncommon for Internet gambling sites to advertise products or services that are illegal in other states.
Overall, however, the best defense against federal prosecution of Internet gambling is to remain vigilant. Regardless, the fact remains that there are no guarantees that the federal government will enforce its laws. Ultimately, it is the state’s law that is the most important and the only one that matters. In the meantime, be sure to be aware of the many state laws that are applicable to Internet gambling, and use them as a tool to help you stay out of trouble. The Illegal Gambling Business Act and other state laws are the best place to start. And remember to keep a close eye on your wallet. Otherwise, you might be the next victim of a legal black market. A hefty fine is on the way. If you are in the market for an Internet gambling site, check with your state’s attorney general to make sure you are not breaking any laws. A small monetary penalty may be worth the risk. You may also want to look into state-approved insurance for gambling sites. A small, inexpensive policy can prevent you from being the next victim of an Internet gambling scam.