Various federal criminal statutes can be implicated when gambling is conducted on the Internet. The statutes include the Illegal Gambling Business Act, the Wire Act, the Travel Act, and the Racketeer Influenced and Corrupt Organizations Act (RICO). The Federal Communications Commission (FCC) has the power to shut down any facility that offers gambling services. However, it is not clear whether the FCC has the authority to ban Internet gambling.
Under Section 1956 of the U.S. Code, a person is prohibited from laundering money that was acquired through illegal gambling. The statute prohibits money laundering that results from the evasion of taxation or promotion of an illicit activity. Additionally, the statute prohibits spending more than $10,000 of illegal gambling proceeds at one time. The statute also prohibits the use of a financial instrument to facilitate the transmission of illegal Internet bets.
Section 1956 also includes several distinct crimes: laundering to disguise, laundering with intent to promote an illicit activity, and laundering with intent to evade taxes. Laundering for international purposes also arises under this statute. However, in recent years, the Commerce Clause has been a point of contention in cases involving online gambling. Some argue that the commerce clause protects speech and does not extend to criminal activity. Others, on the other hand, argue that the commerce clause only protects the exercise of free speech in cases that are of a sufficiently commercial nature. The result is that state officials have expressed concerns that Internet gambling could bring illegal gambling into their jurisdictions. However, the commercial nature of these businesses may satisfy the Commerce Clause.
The Wire Act also prohibits gambling activities that involve sporting events and contests. The Travel Act also prohibits the promotion of unlawful gambling. The Travel Act also prohibits money laundering and the facilitation of illegal gambling. The Federal Communications Commission may also suspend the furnishing of facilities or discontinue the leasing of facilities.
The Racketeer Influenced and Corruption Organizations Act (RICO) provides for imprisonment for five years for those who manage or operate an illegal gambling business. However, this statute has been challenged on constitutional grounds. These attacks have been mostly unsuccessful.
A licensed gambling site is legally bound to present randomized, fair betting odds. This equalizes the playing field. In addition, the FCC has the authority to prohibit the use of financial instruments for illegal Internet gambling. In order to obtain a warrant, probable cause must be present. However, there is little if any evidence that the FCC is using the warrant to enforce state gambling laws.
In the United States, a gambling business is limited to five or more persons. This includes directors, managers, proprietors, and employees. In addition, the owners of a gambling business must have gross revenues of at least two thousand dollars during a thirty-day period. This number is reduced to four hundred dollars if the business is operated by five or fewer people. The owner must also have a substantially continuous operation of the business for thirty days.