Several federal criminal statutes are implicated by online gambling. These statutes include the Wire Act, the Illegal Gambling Business Act, the Racketeer Influenced and Corrupt Organizations (RICO) provisions, and the Travel Act.
The Travel Act is a federal law that prohibits promotion of illegal gambling, facilitating illegal gambling, and money laundering. It also prohibits interstate commerce of gambling. The jurisdiction of the Travel Act is based on either an interstate nexus, or an interstate or foreign nexus to the distribution of gambling proceeds.
A gambling business must operate at least two days a week and generate at least $2,000 in gross revenue per day. Owners of illegal gambling businesses can be imprisoned for up to five years. The business may also be fined. The owner of an illegal gambling business may not accept payment for illegal Internet gambling. The owner of an illegal gambling business may be subject to Racketeer Influenced and Corruption Organization (RICO) violations.
In the United States, a state may prohibit gambling activities on its own territory. State officials have expressed concern that Internet gambling could bring illegal gambling into their jurisdiction. In some cases, however, interstate or foreign elements can obstruct state enforcement policies.
The federal law in this area reinforces state law in cases. The Commercial Activity Clause (CAC) has been used to attack the government’s power to enforce gambling laws. However, attacks based on the First Amendment guarantee of free speech have enjoyed little success.
