Several federal criminal statutes have been implicated by the illegal internet gambling industry. These statutes include the Wire Act, the Illegal Gambling Business Act, and the Unlawful Internet Gambling Enforcement Act.
The Wire Act, which bans illegal gambling on sporting events, also applies to the internet. It prohibits unlawful gambling on contests, and it prohibits the use of financial instruments for illegal Internet bets.
The Illegal Gambling Business Act, which is enforced by the Attorney General, prohibits the operation of a gambling business that engages in illegal Internet gambling. The owners of an illegal gambling business can be fined or imprisoned for up to five years. An illegal gambling business must operate for a period of two days or more, and its gross revenue must be at least $2,000 per day.
Section 1956 of the federal law prohibits money laundering from the proceeds of illegal gambling. The statute also prohibits spending more than $10,000 in illegal gambling proceeds on one occasion. It also prohibits laundering to hide the identity of the bettor or to disguise the identity of the owner or operator.
The Travel Act is also a federal law that prohibits illegal gambling in interstate commerce. The law can be determined by reference to interstate or foreign nexus, or by reference to debts resulting from gambling.
The Commerce Clause has been a source of contention in cases concerning the enforcement of federal gambling laws. It has been argued that the commercial nature of the gambling business serves as a means to satisfy the Commerce Clause. However, due process arguments have often proved less successful.