Several state governments have been concerned that the internet can be used to facilitate illegal gambling. In response, state officials have enacted laws that regulate internet gambling, including the Wire Act and the Travel Act. Several federal criminal statutes are also implicated, including the Racketeer Influenced and Corrupt Organizations (RICO) provisions. The Wire Act prohibits gambling on sports events, while the Travel Act prohibits gambling on interstate commerce.

There have been several cases in which the enforcement of federal gambling laws has been challenged on constitutional grounds. The first case involved an Internet-based sports bookmaking operation that had been offshored. A federal indictment against the owner of the operation resulted in an E.D. Mo. conviction and the forfeiture of millions of dollars. In addition, U.S. marshals seized $3.2 million from the company. In 2002, the Government Accountability Office published Internet Gambling: Overview of Issues.

Another case involved the owners of a sports betting operation, who were indicted for running an Internet site that offered services to gamblers in other countries. The owners and operators of the company were charged with violating several federal criminal statutes, including the UIGEA. In addition, the company was charged with money laundering and violations of the 18 U.S.C. 1955.

In addition to federal criminal statutes, state laws are involved in many cases. For instance, in New York State, the act of transmitting information from New York via the internet constitutes gambling activity. However, the state’s prohibition on gambling does not protect individual privacy. The same cannot be said of gambling that takes place in the home. The First Amendment guarantees free speech and the right to privacy, but it does not protect gambling that takes place at home. However, the commercial nature of gambling businesses may satisfy Commerce Clause doubts.

A third case involved a Costa Rican casino operation. The operation accepted ads from Tropical Paradise. A federal indictment against the company resulted in the forfeiture of millions of dollars. The company was charged with violations of the UIGEA and Racketeer Influenced andCorrupt Organizations (RICO) provisions. A federal indictment against the company also charged it with money laundering. In addition, the company agreed to a public service campaign to combat illegal Internet gambling and was fined $4.2 million. The case was appealed to the 10th Circuit. The court agreed that the Internet gambling business was not a “state” within the meaning of the Commerce Clause, but the court also held that the Internet gambling operation was not a “state” within the definition of the Wire Act.

There are several other federal criminal statutes that are implicated, including the Interstate Commerce Act, the Wire Act, the Racketeer Influenced And Corrupt Organizations (RICO) provisions, and the Interstate Transportation of Gambling Devices Act, also known as the Johnson Act. The Federal Communications Commission has jurisdiction over common carriers, such as telephone and cable companies, and may impose fines and cease furnishing or maintaining facilities.