The Barriers to Online Gambling Regulation


Gambling involves playing a game of chance and/or skill for a prize. It includes games of chance such as lotteries, casino games, sports betting, and poker, as well as games of skill such as keno and bingo. Generally, gambling is illegal without a license, but there are exceptions.

There are many countries and states that restrict gambling. Some laws include age requirements for gambling venues, as well as restrictions on what types of gambling may be conducted. In addition, some counties have jurisdiction over gambling issues.

Currently, most state laws prohibit gambling by people under the age of 18, although some states allow residents to participate in online wagering on sporting events. Those who wish to engage in sports wagering will need to obtain a license from the state in which the wagering is taking place. Several states have also regulated online gambling by allowing for advertising and a licensing requirement for those who wish to operate an Internet casino.

The Internet Gambling Regulation and Tax Enforcement Act (IGRTEO) would regulate and tax online gambling operations. It was introduced in Congress in 2007 by Rep. Barney Frank. Among other things, it would require Internet gambling facilities to be licensed by the director of the Financial Crimes Enforcement Network.

In addition to IGRTEO, the House has introduced several bills to soften the federal internet gambling law. These bills were rejected by the legislature. Nevertheless, the Department of Justice has explored if Internet gambling regulations should be passed.

During the early 1990s, there were approximately fifteen gambling websites that operated in the US. A Frost & Sullivan report estimated that online gambling revenue surpassed $830 million in 1998. Online gambling was legal in some Canadian provinces and in most countries in the European Union. However, in countries such as the United Kingdom and India, gambling is illegal.

While some individuals see gambling as a hobby, others perceive it as a threat to their health and well-being. The morality of gambling is the biggest hurdle to broader regulation. States have had little to no success in enforcing online gambling laws. This is because of a dormant Commerce Clause doctrine.

Another potential barrier to a broader Internet-based gambling regulation is the potential for legal gambling to be ushered directly into business. If an organization does not have a license, they may be deemed to be aiding and abetting. Furthermore, there are concerns that a company could establish a gambling business in an offshore jurisdiction, and thereby be outside the jurisdiction of state or federal law.

One possible solution to this potential problem is a “Skill Game Protection Act,” which would clarify the Wire Act to limit its application to certain types of Internet-based gambling. An online gaming site could become an illegal gambling destination if a company ties its prizes to its success in a casino game.

A similar case was recently heard in the Fifth Circuit. In this instance, the Department of Justice argued that the 1961 Wire Act covered all forms of Internet gambling. But the Fifth Circuit disagreed.