Using the internet for illegal gambling is illegal under seven federal criminal statutes. These include the Wire Act, the Money Laundering Control Act, the Internal Revenue Service (IRS) Control Act, the Gambling Devices Transportation Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations (RICO) provisions.
Section 1956 of the Unlawful Internet Gambling Enforcement Act prohibits the money laundering of illegal gambling proceeds. This section creates several different crimes, including laundering with the intent to promote illicit activity, concealing an illegal activity, and laundering for law enforcement stings. These crimes have raised constitutional questions regarding the prosecution of illegal Internet gambling.
Section 1957 of the Unlawful Internet Gambling Enforcement ACT further restricts the spending of more than $10,000 of illegal gambling proceeds at one time. This title also prohibits a gambling business from accepting financial instruments from illegal Internet bettors.
A licensed gambling site is legally bound to present randomized, fair betting odds. This provides an equal playing field for consumers. However, the presence of interstate and foreign elements can frustrate state enforcement policies.
The CRS Report RS21984 “Internet Gambling: A Legal Overview” cites state and federal gambling laws and explains how the legal framework of online gambling has changed over time. The report is available in abridged form.
The most obvious example of a law related to the Travel Act is the prohibition of promoting or facilitating unlawful gambling on the Internet. This may be accomplished by reference to shipments in interstate commerce, telecommunications services, a debt resulting from gambling, or a nexus to an interstate or foreign jurisdiction.