During the late 1990s, online gambling began to gain popularity. By the end of the decade, there were over 200 gambling websites available. The Internet became popular for people to place bets on sports games and casino games.
In 1998, the revenues generated from online gambling were more than $830 million. However, the federal government still opposed internet gaming. It tried to interpret the Interstate Wire Act as affecting all forms of gambling. This failed in court.
In 2011, Nevada became the first state to legalize online poker. It also became the first state to permit online sports betting. Until that time, gambling was illegal in the US.
In May 2018, the New Jersey court case came to a head. The Department of Justice indicted three of the biggest online poker sites for violating state gambling laws. The owner, manager, and 12 customers were arrested.
The Department of Justice attempted to reinterpret the Interstate Wire Act as relating to all gambling. The Fifth Circuit disagreed.
Congress has begun to explore online gambling regulations. They have introduced multiple bills to soften the federal law. Some bills would license internet gambling businesses and tax them. Others would restrict online gambling activities.
The Internet Gambling Regulation and Tax Enforcement Act is one bill that would regulate and tax internet gambling businesses. In addition, the Skill Game Protection Act would clarify the Wire Act to exempt certain games.
The United Kingdom Gambling Commission is an example of an online gambling licensing authority. They test software before it hits the market. They offer monitoring and security information to protect players.