Several recent cases have dealt with federal enforcement of online gambling laws. In United States v. K23 Group Financial Services, the federal government charged the Internet poker operator with violations of the 18 U.S.C. 1955, the Unlawful Internet Gambling Enforcement Act (UIGEA), and money laundering. The company has agreed to pay $3 million and conduct a public service campaign.
Federal law prohibits gambling activity on the Internet, but the underlying issue is state law. While gambling is mostly a state matter, federal law is often used to support and reinforce state law. Many state officials are concerned that the internet will be abused as an avenue for illegal gambling in their jurisdictions. In response, a number of states have passed legislation prohibiting Internet gambling.
Online gambling is illegal in the United States under the Illegal Gambling Business Act and the Wire Act. These laws prohibit illegal internet gambling on interstate commerce, contests, and sporting events. Furthermore, Internet gambling activities violate the Racketeer Influenced and Corrupt Organizations Act (RICO).