In the United States, the legality of online gambling has long been a topic of debate, and it can vary from state to state. While the Unlawful Internet Gambling Enforcement Act of 2006 restricts banks from transacting with Internet-based gambling sites, it doesn’t specifically define what constitutes a legal internet gambling site. Previously, it was widely believed that the Federal Wire Act prohibited all forms of online gambling. However, this does not apply to online poker sites, lottery websites, or casinos.
In the 1990s, online gambling became wildly popular, and it seemed to represent an end run around government control of the gambling industry. Online gambling operators could set up shop in an offshore jurisdiction and open up their sites to anyone with a computer and Internet access. And because anyone with a credit card could access these sites, anyone could gamble. This led the Congress and Department of Justice to explore the legality of online gambling and try to regulate it.
Federal law has made online gambling illegal in most states, but there are some exceptions. According to 31 U.S.C. 5362(b), gambling on the internet is prohibited in some jurisdictions. In fact, federal law has also been shown to frustrate state enforcement policies in cases where interstate or foreign elements are involved. State officials have expressed concern that the internet might be used to smuggle illegal gambling to their states.