Your Guide to the Federal Gambling Laws

Gambling is big money in the United States. The industry employs more than 730,000 people and contributes about 137.5 billion dollars per year. Estimates are that online gambling will reach over $59 billion in 2020.

Gambling has many legal restrictions and if you enjoy this activity it is important to know federal gambling laws. Keep reading to learn everything you need to know about this fun, but sometimes illegal, activity.

Gambling and Gaming

Gambling and gaming are two terms often used interchangeably. Many states have some form of legalized gambling, with other types prohibited.

Depending on state law, gaming may refer to playing games such as card games, slot machines, roulette, and craps for monetary wagers. Those same games may also fall under the term gambling, which also refers to other activities where a bet is made, such as dog racing, horse racing, or betting on the outcome of sports.

You do not have to be actively gambling to receiving a gambling conviction. You are running a gambling business if you operate an event or business making money through admissions or take a part of bets made. If your state prohibits gambling businesses, you are in violation of the law.

Underage Gambling

n some states, even if you are not actively gambling you may face criminal charges for underage gambling.

This can happen if you are under 21 and staying in a casino hotel. If authorities see you walking across the casino floor for any reason you may face criminal charges. This can happen even if you are walking to your hotel room or a restaurant.

Underage gambling is a serious offense. Depending on the state you receive the charge in, penalties can include:

• Fines
• Incarceration
• Probation
• Community Service
• Driver’s License Suspension

If you receive a conviction for underage gambling you will have a criminal record. An experienced criminal defense attorney will fight to obtain a dismissal or a reduction in charges.

Online Federal Gambling Law

Most gambling offenses fall within state law. When gambling is conducted through interstate or a foreign country, the charges will be for a federal crime. The Federal Gambling Law pertaining to the internet includes these statutes:

Illegal Gambling Business Act, 18 U.S.C. §1955

• Makes conducting an illegal gambling business a federal crime
• A conviction carries a maximum sentence of five years for each illegal business

The Wire Act, 18 U.S.C. §1084

• Makes it a federal crime to use telecommunications or the telephone for the purpose of running an illegal gambling business for sporting events or contests
• A conviction carries a maximum of two years in federal prison for each time money or credit for bets or wagers was received via wire transfer

The Travel Act, 18 U.S.C. §1952

• Makes using interstate commerce facilities for the purpose of illegal gambling a federal crime
• A conviction carries a 5-20 year sentence

The Racketeer Influence and Corrupt Organizations (RICO) Provisions, 18 U.S.C. §1962

• Makes collecting an unlawful debt or conducting a pattern of gambling offenses as part of an illegal gambling business a federal crime
• A conviction is a maximum 25 years in federal prison and a criminal fine of whichever is higher, $250,000 or twice the proceeds from the illegal business

The Money Laundering Provisions of 18 U.S.C. §1956

• Makes it a federal crime to launder proceeds from an illegal gambling business
• Makes it a federal crime to spend more than $10,000 from illegal gambling at any one time or place
• A conviction can result in 20 years in federal prison and/or fines of either $500,000 or twice the value of the property in the transaction

The Unlawful Internet Gambling Enforcement Act, (UIGEA) 31 U.S.C. §5361-5367

• Makes it a federal crime for a gambling business to take payment for illegal gambling
• A conviction can result in up to five years in federal prison and a lifetime ban on legal gambling

Internet businesses that operate casinos, poker tournaments, or take bets on the internet may be subject to federal prosecution.  The UIGEA provides that no one involved in the business by way of ownership, management, financing, operating gaming, betting or gambling is allowed to:

• Process or accept credit cards
• Accept money through electronic transfers
• Accept any form of payment such as a check or draft
• Accept proceeds from any of the above items in connection with illegal internet gambling

Other areas of gambling that fall under federal crime laws include bookies, underground poker tournaments, and unregistered websites. The classification of illegal gambling business is:

• Operating as a business for more than 30 consecutive days or having a single day revenue of $2,000 or more.
• The business has five or more people working in any capacity
• The business violates state or federal law

Catching Illegal Gambling

The FBI and several other federal organizations investigate suspected illegal gambling. Quite often citizens or watchdog entitles submit a complaint to the FBI, which then goes under investigation.

Regular auditing of websites and internet activity are other ways of gathering information for potential illegal activity.

Your Lawyer’s Role

If you receive criminal charges for illegal gambling, it doesn’t matter whether you are guilty or innocent, a criminal defense attorney is your best line of defense.  Every person in the United States is entitled to legal representation. Your attorney must comply with a code of ethics in providing you with the best legal defense possible, regardless of your guilt or innocence.

In 2019 there were 34 states plus Washington D.C. in which wrongfully convicted persons were exonerated, accounting for a total of 143 people receiving exoneration that year. Texas is one of the top eight states for wrongful convictions, with 15 persons being exonerated in 2019.

There is always the possibility of being in the wrong place at the wrong time and being charged with a crime you did not commit. An experienced gambling defense attorney will obtain all evidence against you and look for holes in the prosecution’s case. Your attorney will fight for a dismissal, a reduction in charges, and prepare for trial.

Keep an Attorney’s Number Handing

If you enjoy gambling for fun, even in well-known legal establishments, keep an attorney’s phone number in your wallet in case you are accused of illegal activity.

The Law Offices of Christopher T. Gore are available for virtual and telephone appointments. Feel free to contact us at (713) 903-7608 with any questions or to schedule an appointment.