Gambling, in general, is an activity that involves betting on something of value in order to win that item. The act of gambling has three main components: a prize, risk, and consideration.
Generally speaking, state and federal laws on gambling differ a bit. Some states have enacted exemptions for a variety of forms of betting, while others have banned certain forms of gambling entirely. For instance, Delaware is one of the few states that does not offer in-person sports wagering, although it does provide online sports betting. Most states do have their own regulations on gambling, and they can fill in any gaps in federal law. However, they do not have the same power as a federal law.
In 2011, the Department of Justice issued a legal opinion stating that the Wire Act does not apply to all forms of online gambling. While this is a step in the right direction, it is not an end in itself. It has raised constitutional questions regarding the government’s ability to prosecute illegal Internet gambling.
Another important law is the Travel Act, which bans illegal gambling activities on interstate commerce. There is also the Unlawful Internet Gambling Enforcement Act, which is a separate law. It prohibits financial institutions from processing transactions with unlicensed gambling websites.
There is also the Racketeer Influenced and Corrupt Organizations (RICO) provision, which prohibits illegal gambling business activities. This statute was passed in response to the mafia-like organizations that ran sports betting businesses across state lines. Other criminal statutes implicated by illegal Internet gambling are the Wire Act and the Illegal Gambling Business Act.
The Department of Justice subsequently changed its interpretation of the Wire Act and now believes that it applies to all forms of gambling. To further complicate matters, this has led to several legal challenges. These cases have focused on the due process and Commerce Clauses, but have yielded little in the way of victories.
A federal law that sets a general tone for gambling is the Professional and Amateur Sports Protection Act. PASPA was a law passed in 2006 that prohibited sports betting in most states, except Nevada. In 2018, the Supreme Court struck down the law on constitutional grounds. Since then, many states have legalized sports betting, including Pennsylvania, New Jersey, and West Virginia. Others have started to regulate other forms of betting, such as poker. As the popularity of legalized Internet gambling grows, individual states are starting to legalize additional forms of betting, such as online casinos.
Despite the numerous legal and political issues associated with the gambling industry, it remains a popular pastime in many communities. Online poker and sports betting are currently available in Delaware, Nevada, and the District of Columbia. In the next two years, Michigan and West Virginia are expected to join the ranks of states with legal online gambling. Ultimately, it will be up to each state to decide whether to pursue legal sports betting in their own state.