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Hastings Communications and Entertainment Law Journal

Abstract

Internet gambling, once coined the "crack cocaine of gambling," has become somewhat of a reality. The industry has grown exponentially, attracting thousands of offshore Internet gambling operators that are unlicensed, untaxed, and unregulated. Policing these operators under decades old antigambling laws presents a difficult task because such laws were enacted before the advent of the Internet. Policy concerns including gambling by minors, gambling addiction, racketeering, tax preservation, and the recommendations by the National Gambling Impact Study Commission collectively prompted the promulgation of the Unlawful Internet Gambling Enforcement Act (UIGEA). The note analyzes the UIGEA to clarify its misconceptions and to determine its underlying goals. The heart of the enforcement bill is to prevent the facilitation of money to, and curb the operation of, illegal offshore Internet gambling operators. This note argues that the UIGEA is an effective enforcement mechanism prohibiting the channeling of funds to illegal offshore Internet gambling operators, while addressing the critics and suggesting proposals so that financial institutions and intermediaries are in compliance with, and preclude circumvention of, the UIGEA. The result of the UIGEA's ban on fund transfers will preserve the status quo of each state being the principal arbiter of gambling legislation and policy.

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