The Internet is not without its controversy. While it is possible to legally place wagers on online casinos and sports betting, there are other issues that have been raised. Among them is the issue of whether federal laws can preempt state action in this arena.
The Department of Justice has been examining online gambling regulations. It is important to note that although some states have approved online wagering, others have rejected the idea. Many states have regulated different aspects of gambling, such as age requirements for the ages of players, as well as the types of games available. Some states have even resorted to prohibiting all forms of gambling.
In 2002, a report was published that explored the issues involved in the regulation of Internet gambling. This paper included citations to state gambling laws, including those of New Jersey and Pennsylvania. These laws largely addressed the question of whether the Wire Act applied to digital wagering. There were also questions as to whether or not a state could enforce its gambling laws in the face of the dormant Commerce Clause doctrine. Ultimately, the report did not discuss these issues in detail.
While it is clear that internet-based gambling will not be limited to casino games and sports betting, some state officials are concerned that the proliferation of these online activities will cause illegal gambling to spread from state to state. Currently, twenty states allow residents to bet on sporting events and poker sites. A handful of others have proposed legislation to legalize these activities. However, these state legislatures have not been particularly active in enforcing the laws.
Nonetheless, the Wire Act may apply to Internet gambling. Nevertheless, there are exceptions that would exempt certain games from this law. For instance, there are casinos that operate in offshore jurisdictions. Another exception is the Travel Act, which applies to Internet casinos. If an act is legal in both the source and destination locations, then it will not be considered illegal under the Wire Act.
States that have permitted some form of online gambling include New Jersey, which offers internet wagering on sports, horse racing, lotteries, and fantasy sports. Michigan is one of the five states that allow poker in digital form. Michigan’s Poker Control Board grants licenses for poker operators and regulates the activities. Other state regulatory bodies include the Pennsylvania Gaming Control Board, which oversees gambling activity in the Keystone State.
Online gambling was popular in the 1990s. It seemed like an end-run around government control. However, in 2011 the Department of Justice began allowing states to pass legislation regarding Internet gambling. Despite the success of the Internet, state officials have not been particularly active in enforcing these new laws. Ultimately, however, the DOJ’s clarification left the door open for the legalization of poker platforms.
While online gambling has been legal on the federal level, there are numerous arguments to be made as to whether it is constitutional to enforce such laws on a state level. One argument is based on the guarantee of free speech and the other on the Commerce Clause. Since it is unlikely that the state will be able to enforce its laws if they run afoul of the dormant Commerce Clause, attacks based on these two grounds have not produced much success.