Despite the legality of online gambling, state officials have expressed concerns that it may be used to bring illegal gambling into their jurisdictions. Many internet gambling sites do not pay taxes to their home countries. This means that some banks in certain countries may refuse to process transactions with these websites.
Several federal criminal statutes are implicated by illegal Internet gambling. These statutes include the Wire Act, the Illegal Gambling Business Act, and Racketeer Influenced and Corrupt Organizations (RICO) provisions.
The United States Department of Justice has attempted to estimate the size of the online gambling industry. The National Gambling Impact Study Commission has also attempted to make estimates.
The first online gambling venue for the general public was the Liechtenstein International Lottery. In 2000, six hundred to seven hundred internet casinos were operating. In 2005, sports book betting accounted for one-third of all Internet gambling. The rest of the online gaming revenue was generated from other games. The revenues from online poker grew faster than those from other forms of online gambling.
The UIGEA (Unlawful Internet Gambling Enforcement Act) prohibits the transfer of money to Internet gambling sites. The law also prohibits accepting financial instruments from illegal Internet bets. It also requires appropriate data security standards.
In March 2005, Antigua was the headquarters of 536 Internet gambling sites. The country required that 3% of their gambling revenues be distributed to the government. In addition, Antigua’s laws limited the amount of money bettors could place per month to $50,000.