Online gambling is the use of computers and the Internet for placing wagers and playing games. This activity includes sports betting, casinos, online poker, and virtual poker. It is illegal under the Wire Act, the Federal Gambling Act, the Illegal Gambling Business Act, the Racketeer Influenced and Corrupt Organizations (RICO) Act, and the Travel Act.
While many people assume that gambling involves playing a game for a chance to win money, it also involves bookmaking, selling chances, and pool-selling. Some of these activities are legal, while others are not. For example, some states prohibit gambling within a home. However, state law is less strict than federal laws. Nevertheless, federal law often reinforces state law in cases.
The simplest form of online gambling is sports betting. Sports betting involves placing bets on the outcome of a sporting event. A gambling site allows you to enter a bet and the amount will be automatically deducted from your account. You can choose to bet on a specific team, or you can pick a number to bet on. Typically, a sports betting site lists all of the sports for which they offer betting and their upcoming events.
Many online gambling sites are designed with advanced software that allows users to participate in a variety of online games. These games are typically graphical representations of real casino games. They are compatible with almost any computer and smartphone, and allow players to access the gaming sites through a web browser. When you register with a betting site, you will need to provide your credit card information and deposit a certain amount of money. Once you have set up an account, you will be able to make bets and play the games on the website.
While there are few state laws that explicitly prohibit gambling on the internet, several federal statutes do. For example, the Wire Act, the Federal Gambling Law, the Illegal Gambling Business Act, and the Racketeer Influenced or Corrupt Organizations Act all prohibit the activities of illegal Internet gambling. Additionally, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) imposes penalties on banks, payment processors, and other financial institutions that assist in the facilitating of an illegal Internet bet.
The United States Attorney’s Office has been pursuing Internet gambling violations. In November 2004, the Attorney General charged PayPal, the largest financial institution in the world, with operating an illegal gambling operation. Another major online gambling company, Sporting News, agreed to pay a $4.2 million fine and launch a public service campaign to educate consumers on the risks of gambling.
Although these cases are the most well-known, there have been numerous other prosecutions of illegal gambling on the internet. Some of these cases have been successful, while others have not. One of the most significant challenges to federal enforcement is based on the First Amendment’s guarantee of free speech. But even attacks based on this guarantee have not been successful.
There are many other issues related to Internet gambling, including those related to the Commerce Clause, the Due Process Clause, and the Fifth and Fourteenth Amendments. Some of these issues are detailed in CRS Report RS22749.