During the late 1990s, online gambling gained significant popularity. Approximately 200 gambling websites were in existence. These included sports books, casinos, poker rooms, and online lottery games. In 1998, online gambling revenues reached $830 million.
During that same year, Congress introduced the Internet Gambling Prohibition Act, which would have prohibited Internet gambling for U.S. citizens. The bill was introduced by Senator Bob Goodlatte and Senator Jon Kyl. They proposed to prohibit online gambling activities except for state lotteries and horse races.
The law also prohibits the use of financial instruments in Internet bets. The Federal Communications Commission is tasked with regulating common carriers. It has the authority to prohibit or discontinue furnishing or leasing facilities and equipment, and may also discontinue providing services.
The Federal Information Technology Rules address online gambling. Section 5362(10) defines unlawful Internet gambling as using at least part of the Internet for gambling purposes. This includes placing bets, receiving bets, and verifying the age of users. In addition, it includes appropriate data security standards.
In a recent lawsuit, the government charged Internet poker operators with violating 18 U.S.C. 1955. This is in addition to the charges against Sporting News, which agreed to pay a fine of $4.2 million and launch a public service campaign.
In addition to the federal law, several state laws also criminalize gambling. Some states prohibit gambling for anyone under 18, while others regulate gambling primarily on state rather than federal levels.