During the late 1990s, online gambling gained popularity. The first online poker rooms were introduced. In 1999, multiplayer online gambling was introduced. There were approximately 200 gambling websites in 1997.
In the United States, illegal gambling on the internet involves using at least part of the Internet. It also involves placing bets online, receiving bets online, and transmitting bets online. Using a credit card or other financial instrument from a place where illegal Internet gambling is taking place, is considered unlawful. The penalties for unlawful gambling are both civil and criminal.
There are several federal criminal statutes that have been implicated by illegal gambling on the Internet. The Justice Department’s move to enforce the Wire Act applies to all forms of Internet gambling. This has raised questions about whether the Commerce Clause gives the federal government the power to enforce gambling laws. Nevertheless, the commercial nature of the gambling business appears to satisfy these objections.
Section 1956 of the Federal Criminal Code creates laundering for international purposes and laundering to conceal. It also creates laundering to evade taxes. These statutes have raised constitutional objections to prosecuting illegal Internet gambling.
The Federal Information Technology Rules are also aimed at preventing illegal gambling on the Internet. They require that online gambling service providers obtain a license from the director of the Financial Crimes Enforcement Network. They also address the advertising of online gambling.
A federal criminal case has been filed against the founders of three of the largest Internet poker companies. They are charged with money laundering and violating the Unlawful Internet Gambling Enforcement Act. They also allegedly engaged in bank fraud.