Throughout the years, there have been several instances in which federal criminal laws have been cited in connection with illegal gambling activities conducted online. These include the Wire Act, which prevents illegal gambling on contests, sports, and other events, and the Illegal Gambling Business Act, which prohibits activities related to illegal gambling businesses.
The Internet Gambling Prohibition Act, also known as IGPPA, was introduced to the US Senate as a bill in 1999. The bill would have prohibited US citizens from participating in online gambling. It would have also imposed fines on those who were engaged in illegal gambling, and prohibited the use of financial instruments for illegal Internet bets. In the event of a prosecution, the maximum penalty would be six months in prison, and a $25,000 fine.
A number of states have expressed concerns about the possibility of online gambling bringing illegal activities into their jurisdictions. As a result, federal law has largely reinforced state laws. In some cases, this has led to attacks on the Commerce Clause, based on the free speech guarantees of the First Amendment. However, these attacks have generally proved ineffective.
For example, the Internet Gambling Prohibition Act would have limited gambling to states with lotteries. Other bills, such as Jon Kyl’s bill, would have limited online gambling activities to horse races.
The Kahnawake Gaming Commission, which is located in the Mohawk Territory of Kahnawake, issues licenses for many online gambling operations. These include several online poker rooms. The Kahnawake Gaming Commission also attempts to keep the operations of licensed online gambling organizations fair. This includes elements to weed out lower level gambling cases.
In a recent case, the 4th Circuit found that the Wire Act applied to all forms of Internet gambling. This includes sports betting, casino gaming, virtual poker, and online betting. The Justice Department announced that it would enforce the Wire Act in connection with all forms of Internet gambling. The Justice Department’s announcement, which was criticized by many, has raised questions about the legal basis for its action.
The First Amendment’s free speech guarantee has also been raised as a basis for an attack on the enforcement of federal gambling laws. However, the commercial nature of the gambling business has seemed to satisfy the Commerce Clause’s doubts.
In addition to the Wire Act, the Illegal Gambling Business Act and the Racketeer Influenced and Corrupt Organizations (RICO) provisions of the law prohibit illegal gambling business activities. However, these laws have been challenged on constitutional grounds, with the result that the due process protections of the First Amendment have been severely limited.
In the case of the United States v. K23 Group Financial Services, the prosecution charged that K23 Group Financial Services violated the UIGEA, which is the federal law that prohibits the use of financial instruments for illegal Internet gambling. The prosecution claims that K23 Group Financial Services illegally engaged in the operation of an online poker room, as well as the sale of gambling devices. The prosecution also claims that K23 Group Financial Services engaged in money laundering.
