Whether the federal government is able to prosecute illegal Internet gambling has remained an open question. State officials have expressed concerns that the Internet could be used to bring illegal gambling into their jurisdictions. In response, lawmakers have enacted laws that will discourage casual gamblers.
The Department of Justice has attempted to estimate the size of the online gambling industry. Some estimates put the market at six hundred to seven hundred websites. The National Gambling Impact Study Commission has estimated that Internet gambling revenues reached $2 billion in 2000. Other estimates, including those from Christiansen Capital Advisors and Bear Stearns & Co., have been less precise.
The United States Department of Justice has sought to prosecute illegal Internet gambling under seven criminal statutes. These include the Wire Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations (RICO) provisions. In addition, the law prohibits the acceptance of financial instruments from illegal Internet bets.
The Commerce Clause and the First Amendment have been invoked to argue against the enforcement of federal gambling laws. However, these attacks have had limited success. In the case of the Commerce Clause, the commercial nature of the gambling business seems to satisfy the doubts. In the case of the First Amendment, the limited First Amendment protection for crimes that facilitate speech encumbers free speech objections.
Although the legality of Internet gaming is uncertain, it is safe to say that there is a huge amount of risk associated with online gambling. This includes access to online gambling by vulnerable people, the use of online gambling by children, and payouts that are not fair.