Several countries in the Caribbean Sea and some provinces in Canada have legalized online gambling. This includes virtual poker, casinos, and sports betting. The United States has also been a player in this industry, as well. A Frost & Sullivan report released in 1998 stated that online gambling revenues had reached $830 million.
The Internet Gambling Prohibition Act (IGPA) was a bill introduced into the Senate in 1999. The bill proposed a ban on online gambling to US citizens. However, a few states have legalized online gambling, including New Jersey, Pennsylvania, Nevada, and Washington. In addition, several other states have begun to legalize online sports betting, including Mississippi, West Virginia, and Illinois. In the US, gambling laws are usually state-based, and state officials are concerned that the Internet may be used to bring illegal gambling into their jurisdictions.
There have been many legislative efforts to regulate online gambling, including a bill introduced in the US Senate by Senator Jon Kyl. The bill would have restricted online gambling activities, except for state lotteries. Currently, several similar bills have been introduced in the House, including HR 2046, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. In April 2007, Congressman Barney Frank introduced HR 2046, which would amend the UIGEA to require the licensing of Internet gambling facilities by the director of the Financial Crimes Enforcement Network (FinCEN).
The aforementioned UIGEA was the first federal law to ban online gambling in the US. However, it is not the only federal law that has been challenged on constitutional grounds. The following are a few of the more popular gambling laws that have been challenged by the federal government:
CRS Report RS21984 is an abridged version of a much larger report, which lists the most important citations for the Internet Gambling Prohibition Act, including a brief history of gambling. The report also includes an extensive list of citations to state gambling laws, including the CRS Report RS21984 itself.
The First Amendment to the Constitution states that no law may be enacted which impairs the freedom of speech or the free exercise of religion. The same is true of the Commerce Clause, which states that no law may be enacted to “deprive any person of life, liberty, or property, without due process of law.” Consequently, questions about legislative power under the Commerce Clause have been raised. However, such attacks have yet to garner much success.
The CRS Report RS21984 also lists several other interesting gambling-related citations, including the most entertaining and obfuscatory ones. The best part about the CRS Report RS21984 is that it contains the text of the cited statutes. This makes the report an easy read.
In addition to the CRS Report RS21984 cited above, the Federal Communications Commission has proposed new rules to regulate Internet gambling. These rules are likely to block illegal activities, and they may also prohibit the leasing or maintaining of facilities. The FCC also may begin to investigate the origins of the illegal gambling industry, and the FCC may discontinue its leasing or furnishing of facilities to Internet gambling companies.