During the last decade, online gambling has experienced a rapid growth. It offers a variety of gambling options, including casinos, sports betting, and virtual poker. Its popularity has led to concerns over criminal activity and the potential harms associated with gambling.
Online gambling is illegal under a number of federal criminal statutes. These statutes include the Wire Act, the Illegal Gambling Business Act, and the Racketeer Influenced and Corrupt Organizations Act (RICO). In the United States, gambling also implicates several state laws.
The United States Department of Justice, the National Gambling Impact Study Commission, and Bear Stearns & Co have all attempted to estimate the size of the online gambling industry. The National Gambling Impact Study Commission estimated that online gambling revenues reached $2 billion in 2000. In 2005, sports book betting accounted for one-third of all Internet gambling.
One of the reasons that online gambling is illegal under federal law is that it is in violation of the Wire Act, which prohibits gambling on sporting events. The Act also prohibits the transmission of bets and wagers over the internet. In addition, the Act prohibits the use of financial instruments in connection with illegal Internet bets.
Another issue is the First Amendment guarantee of free speech. The Due Process Clause of the First Amendment prohibits government interference with free speech. In cases where financial transactions are involved, however, due process arguments are less effective.
The Commerce Clause has also been questioned. It has been argued that the commercial nature of the gambling industry has satisfied the clause.