The federal government has recently taken action against Internet gambling companies. Earlier this year, marshals seized $3.2 million from a California media company that accepted advertisements for the Costa Rican casino operator, Tropical Paradise. PayPal also was warned by federal prosecutors that it could face prosecution for accepting such advertisements.
Internet gambling is an increasingly popular activity, and it has raised concern over gambling habits and the potential for harm. However, online gambling also presents new opportunities to help address these issues. It has the added advantage of allowing for the collection of rich data that can help identify problem gambling at an early stage and devise effective strategies.
Problem gambling can have a variety of forms, and different types of payments may contribute to different types of harm. As payments technology and consumer behavior continue to evolve, the role of gambling operators, vendors, payment processors, and financial institutions is vital in addressing problems related to excessive gambling. It is important for these entities to adopt an informed consumer choice model to help reduce harm caused by problem gambling.
Problem gambling can also occur offline, but it is often more difficult to recognize online. Because online gambling doesn’t require physical entry, people are less likely to seek help. In addition, playing on a mobile device requires little effort and often no additional time. It can be tempting to play without realizing it’s harming your health or relationships.
Constitutional objections to federal prosecution of illegal online gambling
In the United States, there is no Constitutional objection to federal prosecution of illegal online gambling, although many states have enacted laws that prevent online gambling. However, the states have not been particularly active in enforcing their laws. This has been due to the dormant Commerce Clause doctrine, which holds that state laws cannot apply to commerce occurring outside their borders, and therefore the power to regulate commerce is vested in the federal government. Federal preemption also has prevented states from regulating gambling activity on Indian reservations within their state borders, where the federal Indian Gaming Regulatory Act governs the activities.
The first attempt to ban Internet gambling came in the late 1990s when the US Senate introduced a bill. The bill was sponsored by Senators Jon Kyl and Bob Goodlatte and would have restricted all activities online except for state lotteries and horse racing. However, the Supreme Court rejected the bill.
Scope of federal criminal law
While gambling on the Internet is primarily a state matter, federal criminal law can be implicated when there is an interstate or foreign element involved. State officials have expressed concern that the internet could bring illegal gambling into their jurisdictions. However, the federal government has not explicitly addressed whether it applies to online gambling.