Online gambling is the act of placing or receiving bets or wagers for money, or a combination of both, using the Internet. It includes casino games, sports betting, and virtual poker. Some forms of online gambling are legal in some countries while others are banned.
The first online poker rooms appeared in 1998. Hundreds of websites operated in 1997. A Frost & Sullivan report revealed that online gambling revenue reached $830 million in 1998. In April 2007, Representative Barney Frank introduced the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. This legislation would require licensing of internet gambling facilities by the director of the Financial Crimes Enforcement Network.
There are also state laws that prohibit online gambling. Although some states have permitted it, it is still illegal to place bets on sports without a license.
An example of an online gambling licensing authority is the United Kingdom Gambling Commission. Another is the Kahnawake Gaming Commission, which regulates online gaming activity from the Mohawk Territory.
In the US, the Wire Act of 1961 was the law that oversaw online gambling for the longest time. However, the Department of Justice ruled that it applies to all forms of Internet gambling. Moreover, the act has been challenged on constitutional grounds.
While a number of attacks based on the Commerce Clause have failed to gain success, other arguments have succeeded. Specifically, the Due Process Clause, which guarantees the right to free speech, has been attacked.