Illegal Internet gambling is illegal under a number of federal criminal statutes. They include the Wire Act, the Travel Act, and the Illegal Gambling Business Act.
The Wire Act prohibits gambling on contests. It also prevents people from gambling over the internet on sporting events. Among other things, the Travel Act applies to Internet casinos.
Under the Illegal Gambling Business Act, owners of illegal gambling businesses are subject to imprisonment for up to five years. Owners must have gross revenues of at least $2000 in a single day. In addition, they must have an unlawful operation.
Some states have legalized Internet gambling. Michigan is one such state. Several big name brands have started operations in Michigan. These include BetMGM, BetStars, and PokerStars.
However, there are several issues that need to be addressed. First, how does the Commerce Clause apply to state law? Second, how does the Due Process Clause apply to federal laws regulating gambling? Third, how does the UIGEA affect interstate commerce?
The Commerce Clause has been a point of contention in many cases. For example, in United States v. Grey, bartenders and video poker machine managers were included. Those involved included layoff bettors and employees at establishments where video poker machines were being used.
As for the Due Process Clause, attacks based on it haven’t been very successful. Nevertheless, the presence of an interstate element in a gambling case is a frustrating factor in enforcement of state laws.