Among the many online gambling controversies, there is a debate about the legality of gambling on the Internet. A number of states have voiced concerns that the Internet can be used to bring illegal gambling into their jurisdictions. And in some cases, there is a real possibility that such activities might be prosecuted.
Several studies have been conducted to estimate the size of the Internet gambling industry. In 2000, it was estimated that over six hundred to seven hundred online casinos were operating in the Caribbean. Other popular locations include Central and South America, the British Isles, and Canadian Native American reservations. But while there has been some progress in the industry, it remains uncertain whether or not the Internet will ever be accepted as an acceptable form of gambling.
There are some good reasons why the legality of online gambling may continue to remain an unresolved question. The first and most obvious is that state and federal laws are not always complementary. For instance, the law of attracting and retaining customers is largely a state issue. However, the Internet is a global medium, and there are some interstate or foreign elements that can frustrate state enforcement policies. Another factor to keep in mind is that the majority of online gaming revenue came from games other than gambling. These games included lottery tickets and pari-mutuel race betting.
One of the more interesting and entertaining facts of online gambling is that the size of the market is growing at an alarming rate. In 2005, the internet gaming industry was worth over $4 billion in revenues, with sports book betting accounting for roughly a third of the total. This amount was matched by the online poker market. In the same year, casino games accounted for about 25 percent of the industry, while the rest of the industry was made up of other games. In addition, according to the U.S. Department of Justice, some Internet gambling sites were paying far less in taxes than land-based gambling establishments.
While the Internet has made it easier than ever to gamble, it has also spawned a number of scams. Online casinos are often the fronts for fraudsters who want to lure players into an online transaction. These fraudsters will sometimes ask players to contact support, create professional websites, and mention seals of approval. They might also restrict access to their websites, or lure players into another transaction.
Some of the best known examples of illegal Internet gambling are the United States v. Nicolaou case, the United States v. K23 Group Financial Services, and the United States v. Sporting News. These three case studies show that although there are no perfect laws, the law of the Internet is certainly a moving target. While it is not clear exactly which statutes will apply to each of these cases, the Unlawful Internet Gambling Enforcement Act (UIGEA) was enacted to prevent the transfer of money from one online gambling site to another.