Several federal statutes are involved with illegal gambling on the Internet. These include the Wire Act, the Travel Act, and the Illegal Gambling Business Act. In addition, there are state law considerations that might scuttle any attempt to prosecute the illegal Internet gambling industry.
The Travel Act, in particular, is a federal statute that prohibits promoting illegal gambling in interstate commerce, and makes it a crime to facilitate illegal gambling. The statute also prohibits money laundering, and if you own or operate an illegal Internet gambling business you could be in trouble.
The aforementioned Travel Act, paired with the Illegal Gambling Business Act, and the Wire Act, together enact the most comprehensive laws pertaining to illegal Internet gambling. The Illegal Gambling Business Act specifically bans the operation of any gambling business that has a gross revenue of more than two thousand dollars per day. The Travel Act also prohibits the promotion of illegal gambling, and the Wire Act bans the unauthorized betting on sports contests.
The Illegal Gambling Business Act has a few notable provisions, including one that prohibits accepting payments from illegal Internet bettors. This is especially relevant because PayPal has reported several instances of illegal Internet gambling transactions.
One of the best pieces of legislation on the books is the Unlawful Internet Gambling Enforcement Act (UIGEA). This act specifically prohibits the facilitation of illegal Internet gambling, and the resulting fines could be in the tens of millions. It also prohibits the acceptance of financial instruments from illegal Internet bettors, and punishes owners of illegal gambling businesses by fines of up to five years in prison.