Online gambling is also known as e-gambling and enables the players to bet on their favourite games through the internet. It is also possible to play poker and other card games online, and even bet on sports. However, illegal gambling on the Internet is prohibited in most countries. While many people have been enjoying the fun and convenience of online casinos and other gambling venues, some jurisdictions have taken steps to regulate the activity. In some cases, the federal government has joined forces with state and local governments in regulating online gambling.
As the legality of gambling varies from state to state, the question of what constitutes gambling in a particular state remains unclear. Some states have their own legislation, while others have enacted the Public Gambling Act of 1867, a law that governs physical gambling locations.
For example, in New York State, the act of entering a bet qualifies as a gambling activity. Likewise, the act of sending bets over the internet qualifies as gambling in New York.
But while these laws are based in state and federal laws, the enforcement of those laws is complicated by the existence of interstate and foreign elements. This is especially true in the case of gambling sites located in other nations.
A key issue is whether the federal government can effectively regulate gambling based on the Commerce Clause of the Constitution. The Commerce Clause is designed to protect Americans from infringement by foreign countries. That means that a commercial activity that happens to take place in another country does not qualify as a crime. Although the Commerce Clause seems to have been satisfied by the commercial nature of the gambling industry, due process concerns have arisen.
Consequently, Congress introduced the Free Trade and Processing Act, which granted licenses to companies that offer online gambling. This led to the establishment of the Online Casino Industry Association, which represents online gambling companies and their customers.
While some states have their own laws, most of these statutes do not address the concept of Internet gambling. Nevertheless, in 2002, the General Accounting Office issued a report, Internet Gambling: An Overview of Issues, that analyzed the varying federal and state laws.
One of the most notable innovations in online gambling was the Liechtenstein International Lottery, which became the first venue where a general public could bet on a game. Another, the Tropical Paradise, is a Costa Rican casino operation that accepts ads from other sites.
Another significant innovation in the area of online gambling is the introduction of the United States’ Unlawful Internet Gambling Enforcement Act. Section 1956 creates the various types of crimes related to laundering. These include concealing and evading taxes, as well as the more obvious laundering for international purposes. Other important crimes include the gambling-related “smart” stings, law enforcement stings, and the laundering of funds to disguise the source of the money.
Fortunately, the UIGEA has reinforced state law in a number of cases. For instance, PayPal has been warned that it may be prosecuted for accepting financial instruments from illegal Internet bets. Also, the Federal Communications Commission has the power to shut down facilities and discontinue furnishing and renting those facilities.