During the late 1990s, the concept of online gambling gained popularity. At the time, there were about fifteen gambling websites on the Internet. It was estimated that online gambling revenues exceeded $830 million in 1998.
In 1999, the US Senate drafted the Internet Gambling Prohibition Act (PASPA). This legislation would have banned Internet gambling in the United States. It was not passed. However, the United States Department of Justice announced that the Wire Act would apply to all forms of Internet gambling.
A criminal case against three online poker companies was filed. It was discovered that the owners of the three companies had been operating illegal gambling sites. They were convicted and were sentenced to two years probation and fined $25,000 each.
There have been attacks on the federal gambling laws on constitutional grounds. These attacks have enjoyed little success. These attacks are based on the Commerce and Due Process Clauses of the Constitution.
The commercial nature of the gambling business seems to satisfy the Commerce Clause. However, the due process argument is undermined when the financial transactions take place in the United States.
Some state officials have expressed concern that the Internet could be used to bring illegal gambling into their jurisdictions. This concern has led to the development of state laws that regulate gambling. Some states have made gambling legal, while others have not.
In the United States, the law of gambling is primarily a matter of state law. Gambling is not protected by the right of privacy. This is because gambling does not involve an individual interest of the same constitutional magnitude.