The Federal Government’s Role in Regulating Online Gambling


Gambling is defined as placing a bet on a random event in order to win something of value. There are three basic elements involved: the prize, the risk, and the consideration.

The federal government does not outright ban gambling; it leaves it up to individual states to regulate the practice. Most states have laws limiting where and how gambling can take place. In fact, only Hawaii and Utah completely outlaw gambling. Nevertheless, in addition to the state level, the federal government also regulates the activity through the Travel Act, the Wire Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions.

However, federal laws are not without their limitations. For instance, the Wire Act prohibits gambling on sports and contests, while the Travel Act bans gambling on interstate commerce. Moreover, the most important piece of legislation is the Unlawful Internet Gambling Enforcement Act, or UIGEA. Besides regulating commercial activities, the UIGEA also provides for a slew of factors to help weed out the less than glamorous cases.

Aside from the law, the best approach is to familiarize yourself with the laws of your own state. Depending on where you live, you may find it illegal to gamble at a casino or at the local bar. You may also be faced with penalties for gambling in your own home. This does not necessarily protect you from being investigated if you are the target of a crime.

Another law which relates to gambling is the Wire Act of 1961, which was enacted to stop gambling across state lines. Even though the Wire Act did not apply to online gambling, its predecessors have been challenged as constitutionally dubious. Additionally, many state officials are concerned that the internet could be used to incite illegal gambling in their jurisdiction.

Nonetheless, the law’s most noteworthy feature is the fact that it enables state and local officials to enforce the gambling laws they have created. Whether or not this is an effective means of reversing gambling smuggling is yet to be seen. Some states have resorted to enforcing their own rules. Others have taken a wait and see approach.

As with any legal endeavor, there are no guarantees. In addition, even the most well-informed citizen should always be on guard against any unforeseen circumstances. So, it is advisable to research the laws of your own state and consult your own lawyer before attempting to commit any sort of crime. If you’re caught, you can be fined and you may be subject to a prison term.

While there are many other statutory and regulatory mechanisms to combat illegal gambling, the UIGEA stands out. Besides regulating commercial activity, the UIGEA also includes Congressional findings on the effects of the law on interstate commerce. Furthermore, a slew of federal criminal statutes are implicated by the practice of illegal internet gambling.

The UIGEA has spurred a number of lawsuits and debates over the legality of a variety of gambling practices. Nonetheless, it is an important albeit ambiguous statute that is likely to remain in the books for years to come.