The law has been challenged several times on constitutional grounds, including the Commerce Clause, the First Amendment’s guarantee of free speech, and the Due Process Clause. However, these attacks have had varying degrees of success. Commerce Clause arguments have been rebuffed by the commercial nature of the gambling industry, while free speech arguments are weakened by the limited First Amendment protection of crimes facilitating speech. Due process arguments also suffer when financial transactions occur within the United States.
While gambling is a state issue, federal law applies when gambling takes place on the Internet. Generally, federal law reinforces state law. However, some states worry that the Internet will help bring illegal gambling into their jurisdictions. So, they have passed laws to protect Internet players from being subjected to criminal prosecution.
The federal government defines internet gambling as “illegal.” It is prohibited to use the Internet to engage in online betting, including sports betting. Federal law has strict guidelines on gambling, and Internet sites must comply with these regulations. In addition, Internet gambling is illegal if it is not conducted within the United States. The Wire Act makes wagering on sporting events, contests, and other events a violation of federal law. Further, the Travel Act prohibits the use of interstate commerce for illegal gambling purposes.