Online gambling has become a booming industry over the last two years. This includes virtual poker, sports betting, and casino games. Its popularity has led to an increase in federal regulations. These measures include monetary fines and penalties, which may be applied to any online gambling sites that fail to follow the law. However, there are still many states that have resisted legalizing this form of gambling.
A federal law known as the Unlawful Internet Gambling Enforcement Act, or UIGEA, regulates the commercial activities of companies that offer gambling related services. The act is also designed to help stop money laundering. Some of the statute’s other provisions include prohibitions against accepting financial instruments for illegal Internet bets, and a prohibition against allowing a player to use an interstate facility for unlawful activities.
One of the first online gambling sites for the public was Liechtenstein’s International Lottery. Another, a Costa Rican casino operation called Tropical Paradise, was sued by the U.S. Government in 2011. In a subsequent lawsuit, the government claimed that the Internet financial services company involved helped create illegal offshore gambling agreements. Eventually, the company paid $10 million in a civil settlement.
Other federal legislation regulating gambling includes the Unlawful Internet Gambling Enforcement Act and the Travel Act. While the UIGEA is primarily a regulation, it also has some constitutional questions. For example, it has been argued that the law’s protections for free speech are too narrow, as it encroaches on those free speech objections.
On the other hand, the Travel Act is more focused on players who engage in interstate activities for unlawful purposes. Since gambling online is legal in some states, the act may have a smaller effect. Despite this, the Act has been used to seize assets from online gambling sites, and may even prohibit such sites from serving users in the U.S.
The CRS Report RS21984 includes a list of gambling-related laws, and references to state laws. This information will assist your organization in deciding how to proceed, but you should also be aware of some of the specific statutes.
Lastly, you should make sure that you comply with other regulations, such as the KYC and AML requirements. Implementing these measures can help you safeguard against account takeover attacks, as well as money laundering efforts. Depending on your company’s size and industry, you might want to conduct an in-depth audit or perform more thorough verification processes.
Regardless of what steps your organization takes, it’s important to keep an eye on the latest trends in cyber security. Cyberattackers can attempt to steal your customer’s information and even compromise your online gambling site. Therefore, be sure to perform regular external audits of your compliance operations. Even small steps in AML and KYC will go a long way towards helping your organization protect itself against potential fraud and money laundering.
You should also be aware of the UIMOTIONS act, which is a federal law that allows the federal government to issue an official certification to an applicant for a state license for an online gambling establishment. This certification will help you avoid being shut down and may be useful in the future.