Online gambling has been a growing phenomenon in recent years. A study by the University of Bristol revealed that regular gamblers are six times more likely to use online casinos than those who don’t. The same research predicts that the market will grow by 11% annually.
However, the laws that regulate online gambling differ among countries and states. In some nations, online casinos and sports books are legal, while in others, they are illegal. Also, some states have a laissez-faire approach, while others have stricter rules. As more states consider allowing or banning online gambling, the regulatory landscape will be more complex.
The first online poker room was created in 1998, and by 2002, there were more than 200 sites. One of the earliest was Liechtenstein International Lottery, which was the first to offer games to the general public. However, even in the early days of the Internet, it was not uncommon for gambling to be regulated by state governments. For example, the Kahnawake Gaming Commission, a licensing authority for online gaming in the Mohawk Territory, was responsible for issuing gaming licenses to many online gambling organisations.
There are two federal laws that apply to the online gambling industry. First, the Bank Secrecy Act was enacted in 1985, and casinos are now designated financial institutions. They must be licensed, and they must report transactions involving cash amounts of $10,000 or more. Additionally, the Federal Information Technology Rules address this type of activity. These regulations may block illegal activities or require financial institutions to identify beneficial owners of companies opening accounts.
Another federal law that may be relevant to online gambling is the Travel Act. Its purpose is to prevent players from using interstate facilities for unlawful activities. This is particularly applicable to Internet casinos and horse racing betting markets.
Finally, the Federal Information Technology Rules also tackle online gambling. These rules are designed to prevent a company from engaging in illegal activities, such as money laundering. These rules include the required source of funds verification, which can be implemented to cut off customers when they spend more than a certain threshold. Alternatively, casinos can opt to implement more in-depth audits. Having an external audit conducted is the best way to ensure that you are staying on the right side of the law.
In addition to these, online gambling companies are expected to have a robust anti-money laundering (AML) program in place. This is important, as criminals are often able to use online gambling sites as a front for money laundering. Companies must also take measures to confirm that the people accessing their online gambling applications are genuine. If they are not, the money launderers will be able to steal their money.
While no federal law exists that covers every aspect of online gambling, there are several federal agencies that can impose monetary penalties and seize assets in cases of online gambling crimes. Some of these include the Federal Bureau of Investigation’s (FBI) Cyber Crime Fraud unit, the United States Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Secret Service.