Federal Law Prohibiting Online Gambling
Federal law prohibiting online gambling has faced several challenges. The Commerce Clause, the First Amendment guarantee of free speech, and the Due Process Clause have all been challenged. But these challenges have largely failed. Commerce Clause doubts are dispelled by the commercial nature of gambling, while First Amendment free speech arguments are weakened by the fact that the crime involves financial transactions in the United States.
Internet gambling is illegal under the Wire Act and the Illegal Gambling Business Act. In addition, the Travel Act prohibits online betting on interstate commerce. The Racketeer Influenced and Corrupt Organizations Act also prohibits gambling activities on the Internet. If you are caught, you can expect a large fine.
The Federal Trade Commission has issued guidelines for the legality of online gambling. Federal law must be consistent with state laws and regulations. If your state does not prohibit online gambling, the laws will not apply to you. Federal law, however, reinforces state laws. Nevertheless, state officials have expressed concerns about the potential use of the Internet to bring illegal gambling into their states.