Internet Gambling: Overview of Federal Criminal Law







Prepared for Members and Committees of Congress



This a brief summary of the federal criminal statutes implicated by conducting illegal gambling
using the Internet. It also discusses some of the constitutional issues associated with prosecuting
illegal Internet gambling.
Gambling is primarily a matter of state law, reinforced by federal law in instances where the
presence of an interstate or foreign element might otherwise frustrate the enforcement policies of
state law. State officials and others have expressed concern that the Internet may be used to bring
illegal gambling into their jurisdictions.
Illicit Internet gambling implicates at least seven federal criminal statutes. It is a federal crime (1)
to conduct an illegal gambling business, 18 U.S.C. 1955; (2) to use the telephone or
telecommunications to conduct an illegal gambling business, 18 U.S.C. 1084; (3) to use the
facilities of interstate commerce to conduct an illegal gambling business, 18 U.S.C. 1952; (4) to
conduct the activities of an illegal gambling business involving either the collection of an
unlawful debt or a pattern of gambling offenses, 18 U.S.C. 1962; (5) to launder the proceeds from
an illegal gambling business or to plow them back into the business, 18 U.S.C. 1956; (6) to spend
more than $10,000 of the proceeds from an illegal gambling operation at any one time and place,

18 U.S.C. 1957; or (7) since passage of the Unlawful Internet Gambling Enforcement Act, P.L.


109-347 (2006), for a gambling business to accept payment for illegal Internet gambling, 31
U.S.C. 5361-5367.
There have been suggestions that enforcement of these provisions against illegal Internet
gambling may raise constitutional issues under the Commerce Clause, the First Amendment’s
guarantee of free speech, and the Due Process Clause. The commercial nature of a gambling
business and the reliance of the Internet on telephone communications seems to satisfy doubts
under the Commerce Clause. The fact that illegal activities enjoy no First Amendment protection
appears to quell free speech objections. The due process arguments raised in contemplation of
federal prosecution of offshore Internet gambling operations suffer when financial transactions
with individuals in the United States are involved.
A bibliography, citations to state and federal gambling laws, and the text of the statutes cited
above are appended. This report appears in abridged form, without footnotes, full citations, or
appendices, as CRS Report RS21984, Internet Gambling: An Abridged Overview of Federal
Criminal Law; related CRS Reports include CRS Report RS22418, Internet Gambling: Two th
Approaches in the 109 Congress.






Introduc tion ..................................................................................................................................... 1
Federal Criminal Law......................................................................................................................3
The Wire Act.............................................................................................................................3
Illegal Gambling Businesses...................................................................................................10
Travel Act................................................................................................................................14
Racketeer Influenced and Corrupt Organizations (RICO)......................................................17
Money Laundering..................................................................................................................20
Laundering the Proceeds.........................................................................................................21
Promotion.......................................................................................................................... 21
Concealment .....................................................................................................................22
Tax evasion, smurfing and international laundering.........................................................23
Spending the Proceeds......................................................................................................24
Unlawful Internet Gambling Enforcement Act.......................................................................25
Proscr ipti ons ..................................................................................................................... 25
Enforcement ...................................................................................................................... 29
Constitutional Considerations.................................................................................................34
Commerce Clause...................................................................................................................34
First Amendment.....................................................................................................................35
Due Process.............................................................................................................................36
Personal jurisdiction..........................................................................................................36
Subject matter jurisdiction................................................................................................37
Appendix A. State Anti-Gambling Laws: Citations......................................................................39
Appendix B. Federal Anti-Gambling Laws: Citations..................................................................40
Appendix C. Selected Federal Anti-Gambling Laws: Text...........................................................42
Appendix D. Bibliography............................................................................................................64
Author Contact Information..........................................................................................................68






This is examination of some of the federal criminal laws implicated by Internet gambling and of a
few of the constitutional questions associated with their application.
American law has always reflected our ambivalence towards gambling. Anti-gambling laws were
common in colonial America, yet even in the Northeast where they were perhaps most numerous 1
the lottery was a popular form of public finance. A majority of states continue to outlaw most
forms of gambling, but most also continue to employ a lottery as a means of public finance and to
allow several other forms of gambling as well. In fact, at least forty-six states permit charitable
bingo; forty-three allow parimutuel betting; thirty-seven have lotteries; twenty-nine have Indian 2
gambling establishments; and thirteen allow casino or riverboat gambling. Americans spend 3
almost $82.2 billion a year on legalized gambling. Estimates on the amount Americans spend on 4
illegal gambling vary widely.
There are many federal gambling laws, most enacted to prevent unwelcome intrusions of 5
interstate or international gambling into states where the activity in question has been outlawed.
They generally deal with lotteries, “numbers” or betting on races and other sporting events, but
several were written with sufficient breadth to cover casino or other kinds of gambling.
Then there is Internet gambling. In some cases, Internet gambling is not much different than
gambling by telephone – a bettor places his bet with a bookie using his computer and e-mail
rather than using just his telephone. But the sophistication of modern computer technology
permits another kind of Internet gambling. The Gambling Commission reported that by mid-1999
there were “over 250 on-line casinos, 64 lotteries, 20 bingo games, and 139 sports books 6
providing gambling over the Internet.” Today, an estimated 2300 Internet gambling sites realize 7
an estimated $6 billion in operating revenue.
Four obstacles initially stood in the way of Internet gambling becoming a multibillion dollar 89
endeavor: the limits of available technology; credibility among the gambling public; an efficient

1 For a detailed history of gambling at common law and colonial America, see CORNELL UNIVERSITY LAW SCHOOL, THE
DEVELOPMENT OF THE LAW OF GAMBLING: 1776-1976 (1977).
2 General Accounting Office [now the Government Accountability Office], Money Laundering: Rapid Growth of
Casinos Makes Them Vulnerable 38 (GAO/GGD-96-28)(January 1996); citations to the various state anti-gambling
statutes are appended; an examination of their content is beyond the scope of this report.
3 Global Gambling Revenues Expected to Rise, ABC NEWS (June 21, 2006), available on Nov. 22, 2006, at
www.abcnews.go.com/Business/wireStory?id=2100864.
4 Blackjack or Bust: Can U.S. Law Stop Internet Gambling?, 16 LOYOLA OF LOS ANGELES ENTERTAINMENT LAW
JOURNAL 667, 668 n.9 (1996)($30 billion); The Offshore Quandary: The Impact of Domestic Regulation on Licensed
Offshore Gambling Companies, 25 WHITTIER LAW REVIEW 989, 989 (2004)($380 billion). The estimates for illegal
gambling are necessarily speculative and consequently creditable estimates may vary considerably.
5 Citations to federal gambling statutes are appended.
6 The National Gambling Impact Study Commission, Final Report, 2-16 (1999).
7 H.Rept. 109-412, Pt. 2, at 8 (2006); McCarthy & Swartz, New Legislation May Pull the Plug on Online Gambling,
USA TODAY (Oct. 3, 2006), available on Nov. 22, 2006 at www.usatoday.com/tech/2006-10-02-internet-gambling-
usat_x.htm.
8 Kanaley, Technical Matters Hinder Internet Gambling, ARIZONA REPUBLIC/ PHOENIX GAZETTE E1 (Jan. 6, 1997).
9 Horvitz, Cyber Gambling Proves Dicey for Bettors, Regulators Alike, WASHINGTON TIMES 42 (Nov. 11, 1996).





financing mechanism;10 and confirmation of claims that Internet gambling was legal.11 Many of
the technical challenges seem to have been overcome. As for consumer acceptance, although 12
noted earlier reliable statistics can be somewhat elusive, its popularity seems to supply the
surest test. Financial complications appear to have slowed but hardly crippled the growth of 13
Internet gambling. True, historically the courts would not enforce gambling debts. And some
major credit card issuers and economic transfer services have acted to block use of their credit 14
cards and services for Internet gambling purposes. Yet, there seems to be some question whether
the use of credit cards and fund transfers for Internet gambling purposes was ever completely 15
thwarted prior to passage of the Unlawful Internet Gambling Enforcement Act.
On the legal front, gamblers have introduced features like proxy gambling, gambling for credit,
and at least the claim of gambling in a virtual offshore gambling locale to induce bettors to 16
believe they have overcome legal prohibitions. In fact, they have not. Nevertheless, enforcement

10 Growth of Internet-Based Gambling Raises Questions for Bank Systems, BNAS ELECTRONIC INFORMATION POLICY
& LAW REPORT (Feb. 28, 1997).
11 Kanamine, Gamblers Stake Out the ‘Net, USA TODAY 1A (Nov. 17, 1995).
12 The Gambling Commission cited to the Sebastian Sinclair (Christiansen/Cummings Associates) estimated world-
wide revenues of $300 million for 1997 and $651 million for 1998, The National Gambling Impact Study Commission,
Final Report, 2-15 (1999). Media accounts refer to estimates by Sinclair and others of revenues of $651 million for
1998, $1.2 billion for 1999, and $3 billion by 2002, Thompson, Who Is Gambling Online?, CNN.COMM (June 29,
1999); Schouten, Betting Is “Virtual” But Debt Is All Too Real, USA TODAY (Dec. 27, 1999). Whether the estimated
revenues for 2002 were a withdrawal from earlier estimates of $10 billion, Online Gambling Goes Global, TIME
MAGAZINE (Sept. 27, 1999) or were simply a more conservative estimate is open to question. One author indicated they
may be both, Kelly, Internet Gambling Law, 26 WILLIAM MITCHELL LAW REVIEW 117, 119-20 (2000) (Observers
disagree about the projected growth of Internet gambling. One reporter predicted that by 2000 it might be a $60 billion
per year business. The Chicago Crime Commission . . . predicted that Internet gaming would be a $25 billion annual
business by 2000. Jason Ader . . . suggested it could soon become a $10 billion per year industry. By contrast,
Sebastian Sinclair . . . downgraded Internet gaming projections for the year 2000 from $8.661 billion (1997) to $6.163
billion (1998). . . . By 1999, Sinclair estimated actual Internet gaming revenues in 2000 would be $1.52 billion. Frost
and Sullivan . . . estimates online gaming revenues will be $2.617 billion by 2000 and $11 billion by 2005”).
Christiansen Capital Advisors estimated U.S. online betting at $4 billion for 2002 and almost $5.7 billion for 2003,
Christiansen Capital Advisors, GROSS ANNUAL WAGERS OF THE UNITED STATES, Table 4 (2004).
13 Gambling, 38 AM.JUR.2D §210 (1999), citing, Pearce v. Rice, 142 U.S. 28 (1891), inter alia. Enforcing obligations
that grew out of illegal conduct was thought contrary to sound public policy.
14 Prosecutors, Plaintiffs Aim to Curb Internet Gambling, 40 TRIAL 14 (Aug. 2004); S.Rept. 108-173, at 4 (2003);
American Banker, 1 (April 2, 2003).
15 Hurt, Regulating Public Morals and Private Markets: Online Securities Trading, Internet Gambling, and the
Speculation Paradox, 86 BOSTON UNIVERSITY LAW REVIEW 371, 435 (2006)(“After paying ten millions dollars in
forfeiture payments to the DOJ . . . PayPal. . . agreed to abandon the lucrative Internet gaming business . . . but other
non-U.S. companies have stepped in to fill the gambling void. . . . Following the PayPal settlement, some banks that
issue MasterCard and Visa cards also agreed to disallow payments to offshore gambling sites. In addition, Discover and
American Express have agreed to disallow these charges as well. However, most online gaming sites prominently
display MasterCard and Visa signs to reflect the continuing availability of those forms of payment. As long as the card
is not issued by one of the few, mostly large, merchant banks that will decline the payment, the card will be accepted).
16 See e.g., United States v. Tedder, 403 F.3d 836, 838 (7th Cir. 2005)(David Tedder has been convicted of conspiring
to defraud the United States, see 18 U.S.C. 371, by assisting a wagering enterprise that violated 18 U.S.C. 1084, plus
three counts of money laundering, see 18 U.S.C. 1956(h), 1957. . . Tedder created and operated a business called Clear
Pay to move money between gamblers in the U.S. and a Curacao business called Gold Medal Sports, which Tedder’s
clients operated as a sports book . . . Tedder also created Bahamian shell corporations . . . to help his clients hide their
involvement, and wired the gambling businesss profits to nominee accounts of which he was the custodian, plus other
foreign investments with a patina of legitimacy. Tedder told his clients that the disguise would be impenetrable. He was
wrong. The clients were . . .caught, pleaded guilty, and testified against Tedder . . . . Although he . . . knew about §1084
. . . Tedder told the jury that he thought that Gold Medal Sports and Clear Pay were upstanding businesses operated in
compliance with all laws. This was essentially the tax protesters defense that he just didn’t think that the law, however
(continued...)





can be uncertain. Internet gambling cannot be raided in a traditional sense, and gambling is rarely
a high law enforcement priority even without the complications that the Internet can bring to the
table. It was likewise uncertain for some time whether Internet gambling – like many types of
gambling – would be legalized with regulations put in place to reassure both investors and the 17
gambling public. Be that as it may, today using the Internet to conduct a gambling business,
either involving betting on sporting events or involving a form of gambling illegal under the laws
of the state in which any of the players are located, will almost certainly be a federal crime.

It is a federal crime:
• to use telecommunications to conduct a gambling business, 18 U.S.C. 1084;
• to conduct a gambling business in violation of state law, 18 U.S.C. 1955
• to travel interstate or overseas, or to use any other facility of interstate or foreign
commerce, to facilitate the operation of an illegal gambling business, 18 U.S.C.

1952;


• to systematically commit these crimes in order to acquire or operate a
commercial enterprise, 18 U.S.C. 1962;
• to conduct a gambling business and accept payment for illegal Internet gambling
participation, 31 U.S.C. 5363;
• to launder the proceeds of an illegal gambling business or to plow them back into
the business, 18 U.S.C. 1956;
• to spend or deposit more than $10,000 of the proceeds of illegal gambling in any
manner, 18 U.S.C. 1957; or
• to conspire with others, or to aid and abet them, in their violation of any of these
federal laws, 18 U.S.C. 371, 2.
Commentators most often mention the Wire Act, 18 U.S.C. 1084, when discussing federal 18
criminal laws that outlaw Internet gambling in one form or another. Early federal prosecutions

(...continued)
clear, applied to his endeavors. The district judge gave appropriate instructions to the jury, which . . . convicted him.
The Seventh Circuit upheld his conviction).
17 Pending adjustments in federal law, at least two American jurisdictions stand poised to regulate legalized Internet
gambling, NEV.REV.STAT. §§463.759 to 463.780; V.I.CODE ANN. tit.32, §§601-645. On the other hand, a few states
have supplemented their general anti-gambling laws with specific Internet gambling proscriptions, e.g.,
ILL.COMP.STAT.ANN. ch. 720 §5-28-1(a)(12); IND.CODE ANN. §35-45-5-2; LA.REV.STAT.ANN. §14:90.3; Mich.Comp.
Laws Ann. §§750.301, 752.796; MONT.CODE ANN. §23-5-112; ORE.REV.STAT. §167.109; S.D.COD.LAWS ANN. §§22-
25A-1 to 22-25A-15; WIS.STAT.ANN. §§945.01, 945.03.
18 Gottfried, The Federal Framework for Internet Gambling, 10 RICHMOND JOURNAL OF LAW AND TECHNOLOGY 26, 46
(2004)(“the Wire Act . . . is the federal act most often applied in efforts to prosecute Internet gambling. . . .”); Keller,
The Games the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE LAW JOURNAL 1569, 1580
(continued...)





of Internet gambling generally charged violations of the Wire Act.19 In fact, perhaps the most
widely known of federal Internet gambling prosecutions, United States v. Cohen, 260 F.3d 68 (2d
Cir. 2001), involved the Wire Act conviction, upheld on appeal, of the operator of an offshore,
online sports book.
In general terms, the Act outlaws the use of interstate telephone facilities by those in the gambling
business to transmit bets or gambling-related information. Offenders are subject to imprisonment
for not more than two years and/or a fine of the greater of not more than twice the gain or loss
associated with the offense or $250,000 (not more than $500,000 for organizations), 18 U.S.C.

1084(a), 3571(b),(d). They may also have their telephone service canceled at law enforcement 20


request, and conduct that violates section 1084 may help provide the basis for a prosecution
under 18 U.S.C. 1952 (Travel Act), 1955 (illegal gambling business), 1956 and 1957 (money
laundering), 1961-63 (RICO), and/or 31 U.S.C. 5361-5367 (Unlawful Internet Gambling 21
Enforcement Act). The elements of section 1084 extend to anyone who:
I. being engaged in the business of betting or wagering
II. knowingly
III. uses a wire communication facility
IV. A. for the transmission in interstate or foreign commerce
1. of bets or wagers or

(...continued)
(1999)(“It is the breadth of the Wire Wager Act that has attracted the most attention in the Internet gambling context
because notwithstanding the possible applicability of other federal laws, it directly prohibits the use of a wire
transmission facility to foster a gambling business”); Do Not Bet on Unilateral Prohibition of Internet Gambling to
Eliminate Cyber-Casinos, 1999 UNIVERSITY OF ILLINOIS LAW REVIEW 1045, 1057; Gambling On-Line: For a Hundred
Dollars, I Bet You Government Regulation Will Not Stop the Newest Form of Gambling, 22 UNIVERSITY OF DAYTON
LAW REVIEW 163, 180 (1996); Goldstein, On-Line Gambling: Down to the Wire? 8 MARQUETTE SPORTS LAW JOURNAL
1, 18 (1997); General Accounting Office [now the Government Accountability Office], Internet Gambling: An
Overview of the Issues 11 (Dec. 2002).
19 United States v. Ross, 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999)(denying a motion to dismiss a four count
indictment charging violations of 18 U.S.C. 1084 and 18 U.S.C. 371 (conspiracy) in connection with Internet gambling
business operated out of Curacao in the Netherlands Antilles); see also, People v. World Interactive Gaming
Corporation, 1999 WL 591995 (N.Y.S.Ct. July 22, 1999)(noting in dicta violations of the Wire Act in connection with
an offshore Internet casino that accepted wagers from bettors in New York); cf., United States v. DAmbrosia, 313 F.3d th
987, 987-89 (7 Cir. 2002)(resolution of sentencing issues associated with Wire Act conviction of the operators “of an th
offshore internet-based sports bookmaking operation”); United States v. Tedder, 403 F.3d 836, 838 (7 Cir. 2005).
20When any common carrier, subject to the jurisdiction of the Federal Communications Commission, is notified in
writing by a Federal, State, or local law enforcement agency, acting within its jurisdiction, that any facility furnished by
it is being used or will be used for the purpose of transmitting or receiving gambling information in interstate or foreign
commerce in violation of Federal, State or local law, it shall discontinue or refuse, the leasing, furnishing, or
maintaining of such facility, after reasonable notice to the subscriber, but no damages, penalty or forfeiture, civil or
criminal, shall be found against any common carrier for any act done in compliance with any notice received from a
law enforcement agency. Nothing in this section shall be deemed to prejudice the right of any person affected thereby
to secure an appropriate determination, as otherwise provided by law, in a Federal court or in a State or local tribunal or
agency, that such facility should not be discontinued or removed, or should be restored,” 18 U.S.C. 1084(d).
21 Each of these statutes is discussed, infra, and the text of each is appended.





2. information assisting in the placing of bets or wagers on any sporting event or
contest, or
B. for the transmission of a wire communication which entitles the recipient to receive
money or credit as a result of bets or wagers, or
C. for information assisting in the placing of bets or wagers. . . . 18 U.S.C. 1084(a).
As a general matter, the Wire Act has been more sparingly used than some of the other federal
gambling statutes, and as a consequence it lacks some of interpretative benefits which a more
extensive caselaw might bring. The Act is addressed to those “engaged in the business of betting 22
or wagering” and therefore apparently cannot be used to prosecute simple bettors.
The government must prove that the defendant was aware of the fact he was using a wire facility
to transmit a bet or gambling-related information; it need not prove that he knew that such use 23
was unlawful. The courts have also rejected the contention that the prohibition applies only to
those who transmit, concluding that “use for transmission” embraces both those who send and 24
those who receive the transmission.
Grammatically, interstate transmission appears as a feature of only half of the elements (compare,
“for the transmission in interstate or foreign commerce of bets or wagers or information assisting
in the placing of bets or wagers on any sporting event or contest,” (IV.A.1 & 2. above), with, “for
the transmission of a wire communication which entitles the recipient to receive money or credit
as a result of bets or wagers, or for information assisting in the placing of bets or wagers,” (4.B.
& C. above). Nevertheless, virtually every court to consider the question has concluded that a 25
knowing, interstate or foreign transmission is an indispensable element of any 1084 prosecution.
The execution of a similar interpretative exercise might lead to the conclusion that the section
applies only to cases involving gambling on sporting events (compare IV.A.1 & 2. with IV.B. &
C. again). The vast majority of prosecutions involve sports gambling, but cases involving other 26
forms of gambling under section 1084 are not unknown, and the limitation is contrary to a literal

22 United States v. Scavo, 593 F.2d 837, 843 (8th Cir. 1979)(“If an individual performs only an occasional or
nonessential service or is a mere bettor or customer, he cannot property be said to engage in the business); see also,
Rewis v. United States, 401 U.S. 808, 810-11 (1971)(noting that the absence of a Congressional intent to includemere
bettors among those who, by operation of 18 U.S.C. 2, might be convicted of aiding or abetting a violation of the
Travel Act, 18 U.S.C. 1952 (relating to interstate travel to carry on a gambling business, inter alia), but see, United st
States v. Southard, 700 F.2d 1, 20 n.24 (1 Cir. 1983) (The district court held that the statute did not prohibit the
activities ofmere bettors.’ We take no position on this ruling except to point out that the legislative history is
ambiguous on this point at best).
23 United States v. Blair, 54 F.3d 639, 642-43 (10th Cir. 1995); United States v. Ross, 1999 LW 7832749, Slip at 8-9
(S.D.N.Y. Sept. 16, 1999); cf., United States v. Cohen, 260 F.3d 68, 71-3 (2d Cir. 2001)(conviction for conspiracy to
engage in conduct in violation the Wire Act does not require proof that the defendant knew that the conduct was th
unlawful); contra, Cohen v. United States, 378 F.2d 751, 756-57 (9 Cir. 1967).
24 United States v. Pezzino, 535 F.2d 483, 484 (9th Cir. 1976). United States v. Sellers, 483 F.2d 37, 44-5 (5th Cir.
1973); United States v. Tomeo, 459 F.2d 445, 447 (10th Cir. 1972); Sagansky v. United States, 358 F.2d 195, 200 (1st th
Cir. 1966); contra, United States v. Stonehouse, 452 F.2d 455 (7 Cir. 1971).
25 United States v. Southard, 700 F.2d 1, 24 (1st Cir. 1983), citing inter alia, Sagansky v. United States, 358 F.2d 195,
199 n.4 (1st Cir. 1966); United States v. Barone, 467 F.2d 247, 249 (2d Cir. 1972); Cohen v. United States, 378 F.2d thth
751, 754 (9 Cir. 1967); contra, United States v. Swank, 441 F.2d 264, 265 (9 Cir. 1971).
26 E.g., AT&T Corp. v. Coeur dAlene Tribe, 45 F.Supp.2d 995 (D.Idaho 1998) (lottery); United States v. Smith, 390
F.2d 420, 421 (4th Cir. 1968); United States v. Chase, 372 F.2d 453, 457 (4th Cir. 1967). Smith and Chase both involved
(continued...)





reading of the statute. Nevertheless at least one federal appellate panel has concluded that the 27
Wire Act applies only to sports gambling.
Construction of the Act is further complicated by the defense available under subsection 28
1084(b). Read casually it might suggest a general defense, but the district court in the Internet
gambling case in the Southern District of New York has highlighted its more restrictive scope,
“the §1084(b) exemption by its terms applies only to the transmission of information assisting in
the placing of bets, not to the other acts prohibited in §1084(a), i.e., transmission of (1) bets or
wages or (2) wire communications entitling the recipient to money or credit as a result of bets or
wagers. With regard to transmissions of information assisting in the placing of bets, the
exemption is further narrowed by its requirement that the betting at issue be legal in both
jurisdictions in which the transmission occurs. No exemption applies to the other wire
communications proscribed in §1084(a) even if the betting at issue is legal in both jurisdictions. th29
See United States v. McDonough, 835 F.2d 1103, 1105 (5 Cir. 1988).” The Second Circuit 30
panel in Cohen, endorsed the court’s construction.
An accomplice who aids and abets another in the commission of a federal crime may be treated as 31
if he had committed the crime himself. The classic definition from Nye & Nissen v. United
States, 336 U.S. 613, 619 (1949) explains that liability for aiding and abetting attaches when one
“in some sort associates himself with the venture, participates in it as in something that he wishes 32
to bring about, [and] seeks by his action to make it succeed.” The Department of Justice advised
the National Association of Broadcasters that its members risked prosecution for aiding and 33
abetting when they provided advertising for the online gambling operations.

(...continued)
“numbers” and seem to have arisen under the same facts. None of these cases specifically reject, or even mention, a
sporting event” limitation.
27 In re MasterCard International Inc., 313 F.3d 257, 262 (5th Cir. 2002)(The district court concluded that the Wire
Act concerns gambling on sporting events or contests and that the [RICO] plaintiffs had failed to allege that they had
engaged in internet sports gambling. We agree. . .”).
28Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of
information for use in news reporting of sporting events or contests, or for the transmission of information assisting in
the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that
sporting event or contest is legal into a State or foreign country in which such betting is legal,” 18 U.S.C. 1084(b).
29 United States v. Ross, 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999).
30 260 F.3d at 73 (emphasis added) (Cohen appeals the district court for instructing the jury to disregard the safe
harbor provision contained in §1084(b). That subsection provides a safe harbor for transmissions that occur under both
of the following two conditions: (1) betting is legal in both the place of origin and the destination of the transmission;
and (2) the transmission is limited to mere information that assists in the placing of bets, as opposed to including the
bets themselves).
31Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its
commission, is punishable as a principal,” 18 U.S.C. 2(a).
32 United States v. Hungerford, 465 F.2d 1113, 1117 (9th Cir. 2006), citing, Nye & Nissen v. United States, 336 U.S.
613, 619 (1949); see also, United States v. Ibarra-Zelaya, 465 F.3d 596, 603 (5th Cir. 2006); United States v. Isaac-th
Sigala, 448 F.3d 1206, 1213 (10 Cir. 2006); United States v. Reifler, 446 F.3d 65, 96 (2d Cir. 2006).
33 Advertising for Internet Gambling and Offshore Sportsbook Operations, Letter from United States Deputy Attorney
General John G. Malcolm to the National Association of Broadcasters dated June 11, 2003, filed as Exhibit A with the
complaint in Casino City, Inc. v. United States Department of Justice, Civil Action No. 04-557-B-M3 (M.D.La.),
quoted in, First Amendment as Last Resort: The Internet Gambling Industrys Bid to Advertise in the United States, 50
ST. LOUIS UNIVERSITY LAW JOURNAL 1289, 1290 (2006).
In other related developments, U.S. marshals are reported to have seized $3.2 million that Discovery Communications
(continued...)





In addition to such accomplice liability, a conspirator who contrives with another for the
commission of a federal crime is likewise liable for the underlying crime and for any additional, 34
foreseeable offense committed by a confederate in furtherance of the common scheme.
A complication in construction of the Wire Act arises in the context of horse racing. There are
some suggestions that the Wire Act was amended sub silentio by an appropriations rider 35
rewording a provision in the civil Interstate Horseracing Act. The Justice Department does not 36
share this view.
The Interstate Horseracing Act, 15 U.S.C. 3001-3007, is the product of the emergence of state
licensed off-track betting parlors. The parlors accepted wagers on races conducted both within the
state and without. Race tracks and those dependent upon their success objected that the tracks
were losing customers who lived proximate to both an in state track and an off-track betting 37
parlor in a neighboring state. The Act provides for compensation agreements. More precisely, it
prohibits acceptance of interstate off-track wagers except as provided in the Act, 15 U.S.C. 3003,
but permits such acceptance with the consent of various horse racing associations, state horse
racing commissions, state off-track racing commissions, and horse racing track operators, 15
U.S.C. 3004. It affords aggrieved states, horse racing associations and horsemen’s groups a cause
of action against violators of its provisions, 15 U.S.C. 3005, 3006. It neither provides criminal 38
penalties nor explicitly addresses its relationship to other federal and state gambling laws.

(...continued)
had accepted for ads from Tropical Paradise, a Web casino operation based in Costa Rica, The Wall Street Journal -
Europe, A5 (Aug. 2, 2004), and the federal prosecutors apparently warned PayPal, a money transfer service, that it
risked prosecution under 18 U.S.C. 1960 (transmission of funds intended to be used to promote or support unlawful
activity) by providing services to online gambling operations, American Banker, 1 (April 2, 2003); see also, Smith,
Interbet, It’s Illegal, But Online Gambling Mushrooms Anyway, ROCKY MOUNTAIN NEWS 1B (Jan. 30, 2006)(the
Sporting News earlier this month agreed to pay a $4.2 million fine and launch a $3 million public-service campaign to
settle federal charges it had run illegal online gambling advertising); Internet Gambling Prohibition Act of 2006:
Hearing Before the Subcomm. on Crime, Terrorism, and Homeland Security of the House Comm. on the Judiciary, th
109 Cong. 13 (2006) (Hearing) (statement of Bruce G. Ohr, Chief of the Organized Crime and Racketeering Section,
Criminal Division, United States Department of Justice)([I]n January 2006, the United States Attorneys Office in St.
Louis announced a $7.2 million settlement with the Sporting News to resolve claims that the Sporting News promoted
illegal gambling. . . by accepting fees in exchange for advertising illegal gambling).
34 Pinkerton v. United States, 328 U.S. 640, 645-48 (1946); Salinas v. United States, 522 U.S. 52, 62-3 (1997)(The
partners in the criminal plan must agree to pursue the same criminal objective and may divide up the work, yet each is
responsible for the acts of each other”). The conspiratorial agreement is itself a separate crime under 18 U.S.C. 371 (If
two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or
any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of
the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both. If, however, the
offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such
conspiracy shall not exceed the maximum punishment provided for such misdemeanor); United States v. Matias, 465 thth
F.3d 169, 173 (5 Cir. 2006); United States v. Woodard, 459 F.3d 1078, 1084 (11 Cir. 2006); United States v. Carter, th
449 F.3d 1287, 1298 (D.C.Cir. 2006); United States v. Ruiz, 446 F.3d 762, 769 (8 Cir. 2006).
35 Cabot & Christiansen, Why the Future of Horseracing Is at Risk: The WTO Decision and Senator Kyl, 9 GAMING
LAW REVIEW 201, 204-5 (2005).
36 Hearing, at 146 (statement of Bruce G. Ohr, Chief of the Organized Crime and Racketeering Section, Criminal
Division, United States Department of Justice).
37 S.Rept. 95-554, at 3-5 (1977); see also, S.Rept. 95-1117, at 4 (1978); H.Rept. 95-1733, at 4 (1978).
38 The legislative history, however, suggests the absence of an intent to preempt state gambling laws, S.Rept. 95-1117,
at 3 (1978) (“This procedure is intended to conform with the prevailing view that these matters are generally of State
concern and that the States’ prerogatives in the regulation of gambling are in no [way] preempted by this or other
Federal law); see also, H.Rept. 95-1733, at 3 (1978); Kentucky Division, Horsemens Benevolent & Protective Ass’n,
(continued...)





Although the Act calls for the consent of the operators of any track located within 60 miles of an
off-track betting office, 15 U.S.C. 3004(b), it does not give track operators a cause of action for
failure to comply with this or any of its other requirements, 15 U.S.C. 3005, 3006 (limiting
liability to, and a cause of action for the benefit of, “the host State, the host racing association and
the horsemen’s group”).
One track operator attempted unsuccessfully to invoke the Wire Act and federal racketeer 39
influenced and corrupt organization (RICO) provisions to overcome this limitation. Suffolk
claimed that the defendant, who operated an off-track betting site within 60 miles of Suffolk,
accepted wagers on interstate races without its consent and that these activities involved the
patterned interstate transmission of gambling-assisting information (race results) from the track to
the off-track betting parlor in violation of the Wire Act and consequently constituted a RICO
violation, id. at 1272. The First Circuit affirmed the lower court’s rejection of the claim on the
basis of the Wire Act exception found in 18 U.S.C. 1084(b) that exempts the interstate
transmission of sports gambling-assisting information to and from jurisdictions where gambling 40
on such sporting events or contests is legal. Summarizing in general terms, the court declared:
To recapitulate, we think it clear that Congress, in adopting section 1084, did not intend
to criminalize acts that neither the affected states nor Congress itself deemed criminal in
nature. [The defendants] acts fall into this chiaroscuro category perhaps not right, but
certainly not felonious. It follows that these acts, not indictable under section 1084, cannot
constitute a pattern of racketeering activity within RICOs definitional parameters. Id. at
1273.
The operator of an off-shore internet gambling site subsequently seized upon this “Congress-did-
not-intend-to-criminalize” language when challenging his conviction under the Wire Act, United
States v. Cohen, 260 F.3d 68 (2d Cir. 2001). The Second Circuit rejected the challenge with the
observation that unlike Suffolk where the transmission of gambling-related information came
within the safe harbor of section 1084(b), Cohen’s case involved the online (i.e., wire)
transmission of wagers themselves, a transmission that fall outside the safe harbor provision of
the section 1084(b), id. at 73.
The facts that gave rise to Suffolk and Cohen, however, occurred prior to the 2000 amendments to
the Interstate Horseracing Act. P.L. 106-553, which made appropriations for the District of
Columbia as well as for the Departments of Commerce, Justice and State, amended the definition
of “interstate off-track wager” in the Interstate Horseracing Act to read:

(...continued)
Inc. v. Turfway Park Racing Ass’n, 20 F.3d 1406, 1414 (6th Cir. 1994)(“Under the Act, each state may prohibit
interstate off-track wagering within its borders, and may prohibit a resident racetrack from contracting with an off-track
wagering facility in another state).
39 Sterling Suffolk Racecourse Ltd. v. Burrillville Racing Ass’n, Inc., 989 F.2d 1266 (1st Cir. 1993). RICO prohibits the
acquisition or operation of an enterprise whose activities affect interstate or foreign commerce through the patterned
commission of two or moreracketeering activities”, i.e., two or more other specifically designated offenses (such as
violations of 18 U.S.C. 1084(a)(the Wire Act)), 18 U.S.C. 1961-1968. Anyone injured in his business or property by a
RICO violation enjoys a cause of action for treble damages, 18 U.S.C. 1964(c).
40 Id. at 1272 (“Conceding, withal, that wagering of the sort transacted at [defendant’s] facility is permissible under the
relevant laws of all interested states, appellant pins its RICO-related hopes on section 1084(a). But section 1084(a)
carves out a specific exception for circumstances in which wagering on a sporting event is legal in both the sending and
receiving state. See 18 U.S.C. 1084(b). That exception applies here”).





interstate off-track wager” means a legal wager placed or accepted in one State with respect
to the outcome of a horserace taking place in another State and includes pari-mutuel wagers,
where lawful in each State involved, placed or transmitted by an individual in one State via
telephone or other electronic media and accepted by an off-track betting system in the same
or another State, as well as the combination of any pari-mutuel wagering pools. 15 U.S.C.
3002(3); sec. 629, P.L. 106-533, 114 Stat. 2762-108 (2000) (language of the amendment in
italics).
The language in italics was added for the first time in conference with the simple accompanying
explanation which in its entirety declares, “the conference agreement includes a new section 629,
to clarify the Interstate Horseracing Act regarding certain pari-mutuel wagers,” H.Rept. 106-41
1005, at 317 (2000). A critic objected to the amendment during floor debate. Otherwise the only
reference was “inserted or appended, rather than spoken, by a Member of the House on the 42
floor.”
Proponents claim the amendment permits tracks to accept online, out of state bets from states
where pari-mutuel betting is legal (although not necessarily where either off-track or online 4344
betting is legal); the Justice Department disagrees. Uncertainty over the issue apparently led an
Appellate Body of the World Trade Organization (WTO) to conclude that the United States may
permit domestic entities to offer Internet gambling on horse racing which it denies offshore 45
entities such an opportunity. During hearings on the Unlawful Internet Gambling Enforcement
Act, the Justice Department indicated that to confirm its understanding of the law it was 46
conducting “a civil investigation relating to a potential violation of law regarding this activity.”

41I want Members of this body to be aware that section 629 of the conference report would legalize interstate pari-
mutual gambling over the Internet. Under the current interpretation of the Interstate Horse Racing Act in 1978, this type
of gambling is illegal, although the Justice Department has not taken steps to enforce it. This provision would codify
legality of placing wages over the telephone or other electronic media like the Internet,” 146 Cong.Rec. 24938
(2000)(remarks of Rep. Wolf).
42The conference report contains a provision (Section 629) which clarifies that the Interstate Horseracing Act permits
the continued merging of any wagering pools and wagering activities conducted between individuals and state-licensed
and regulated off-track betting systems located in one or more states, whether such wages are conducted in person, via
telephone or other electronic media, provided such wages are placed on a closed-loop subscriber-based service, which
would include an effective customer and age verification process to ensure that all federal state requirements and
appropriate data security standards are net to prevent unauthorized use by a minor or non-subscriber. The amendment
clarifies that the Interstate Horseracing Act permits wagers made by telephone or other electronic media to be accepted
by an off-track betting system in another state provided that such types of wages are lawful in each state involved and
meet the requirements, if any, established by the legislature or appropriate regulatory body in the state where the person
originating the wager resides, 146 Cong.Rec. 24979 (2000)(Rep. Rogers)(this statement appears in type face used to
indicate[] words inserted or appended, rather than spoken by a Member of the House on the floor, 146 Cong.Rec.
24908 (2000)).
43 Cabot & Christiansen, Why the Future of Horseracing Is at Risk: The WTO Decision and Senator Kyl, 9 GAMING
LAW REVIEW 201, 204-5 (2005).
44 Hearing, at 146 (statement of Bruce G. Ohr, Chief of the Organized Crime and Racketeering Section, Criminal
Division, United States Department of Justice).
45[T]he United States has not shown, in light of the Interstate Horseracing Act, that the prohibitions embodied in
those measures [i.e., the Wire Act, the Travel Act, and the Illegal Gambling Business Act] are applied to both foreign
and domestic service suppliers of remote betting services for horse racing,” United States Measures Affecting the
Cross-Border Supply of Gambling and Betting Services (AB-2005-1), WT/DS285/AB/R, at 126 (April 7, 2005),
available on November 17, 2006 at, www.wto.org/english/tratop_e/disput_e/285abr_e.pdf.
46 Hearing at 14 (statement of Bruce G. Ohr, Chief of the Organized Crime and Racketeering Section, Criminal
Division, United States Department of Justice).





On the face of it, an illegal gambling business conducting its activities by way of the Internet
seems to come within the reach of section 1955. The limited commentary on the point appears to 47
concur. Dicta in an early federal appellate decision likewise strongly suggested the applicability
of section 1995:
[U]nder §1955, it is quite obvious that bettors should not be held criminally liable either
under the statute or under §2 and that local merchants who sell the accounting paper or the
computers on which bets are registered are not sufficiently connected to the enterprise to be
included even if they know that their goods will be used in connection with the work of the
business. On the other hand, it seems similarly obvious that the seller of computer hardware
or software who is fully knowledgeable about the nature and scope of the gambling business
would be liable under §2 if he installs the computer, electronic equipment and cables
necessary to operate a wire shop” or a parimutuel betting parlor, configures the software
programs to process betting information and instructs the owners of the gambling business
on how to use the equipment to make the illegal business more profitable and efficient. Such
actions would probably be sufficient proof that the seller intended to further the criminal 48
enterprise.
Violations of section 1955 are punishable by imprisonment for not more than 5 years and/or fines
of the greater of not more than twice the gain or loss associated with the offense or $250,000
($500,000 for an organization), 18 U.S.C. 1955(a), 3571(d). Moreover, the federal government
may confiscate any money or other property used in violation of the section, 18 U.S.C. 1955(d).
The offense may also provide the foundation for a prosecution under the Travel Act, 18 U.S.C.

1952, the money laundering statutes, 18 U.S.C. 1956 and 1957, and RICO, 18 U.S.C. 1961-1963.


The elements of section 1955 apply to anyone who:
I. A. conducts,
B. finances,
C. manages,
D. supervises,
E. directs, or
F. owns
II. all or part of an illegal gambling business that
III. A. is a violation of the law of a State or political subdivision in which it is conducted;

47 Gottfried, The Federal Framework for Internet Gambling, 10 RICHMOND JOURNAL OF LAW AND TECHNOLOGY 26, 53
(2004)(“While section 1955 has yet to be successfully used to prosecute an Internet gaming operation, its minimal
requirements may make it a likely candidate for future use); General Accounting Office [now the Government
Accountability Office], Internet Gambling: An Overview of the Issues 11 (Dec. 2002); Blackjack or Bust: Can U.S.
Law Stop Internet Gambling? 16 LOYOLA OF LOST ANGELES ENTERTAINMENT LAW JOURNAL 667, 675-77 (1996).
48 United States v. Hill, 55 F.3d 1197, 1200 (6th Cir. 1995).





B. involves five or more persons who conduct, finance, manage, supervise, direct, or own
all or part of such business; and
C. has been or remains in substantially continuous operation for a period in excess of
thirty days or has a gross revenue of $2,000 in any single day.
“[N]umerous cases have recognized that 18 U.S.C. 1955 proscribes any degree of participation in 49
an illegal gambling business except participation as a mere bettor.” Or as more recently
described, “‘[c]onductors’ extends to those on lower echelons, but with a function at their level 50
necessary to the illegal gambling operation.”
The section bars only those activities that involve illegal gambling under applicable state law and
that meet the statutory definition of a business. Illegal gambling is at the threshold of any
prosecution under the section, and cannot to be pursued if the underlying state law is 5152
unenforceable under either the United States Constitution, or the operative state constitution.
The business element can be satisfied (for any endeavor involving five or more participants)
either by continuity (“has been or remains in substantially continuous operation for period in 53
excess of thirty days”) or by volume (“has a gross revenue of $2,000 in any single day”). The
volume prong is fairly self-explanatory and the courts have been fairly generous in their 54
assessment of continuity. They are divided, however, on the question of whether the 55
jurisdictional five and continuity/volume features must coincide.

49 Sanabria v. United States, 437 U.S. 54, 70-1 n.26 (1978); United States v. Atiyeh, 402 F.3d 354, 372 (3d Cir. 2005).
50 United States v. OBrien, 131 F.3d 1428, 1431 (10th Cir. 1997). Perceptions of necessity are not always particularly
demanding, see e.g., United States v. Heacock, 31 F.3d 249, 252-53 (5th Cir. 1994)(may includeeveryone from layoff th
bettors and line services to waitresses who serve drinks); United States v. Grey, 56 F.3d 1219, 1221 (10 Cir.
1995)(bartenders and managers of establishments where the defendant placed his video poker machines and who
recording winnings, made payoffs, and reset the machines were properly counted as conductors of the defendant’s th
gambling business); United States v. Mick, 263 F.3d 553, 568-69 (6 Cir. 2001)(layoff bettors may be considered part
of the requisite five members, so long as their dealings with the gambling business are regular and not just based on one th
contact”); United States v. Febus, 218 F.3d 784, 797 (7 Cir. 2000)(emphasis added) (conduct for purposes of section
1955 extends to the performance ofany act, function or duty which is necessary to or helpful in the ordinary operation
of the business including the owner of a bar who knowingly allowed gamblers to use the bar as a collection site); th
United States v. Chance, 306 F.3d 356, 379-80 (6 Cir. 2002)(regularly helpful or necessary to the operation of the
gambling enterprise); Requirement of 18 U.S.C. §1955, Prohibiting Illegal Gambling Business, That Such Business
Involve Five or More Persons, 55 ALR FED. 778 (1981 & 2006 Supp.).
51 Cf., United States v. Hill, 167 F.3d 1055, 1063-64 (6th Cir. 1999).
52 Cf., United States v. Ford, 184 F.3d 566, 582-83 (6th Cir. 1999).
53 Sikes v. Teleline, Inc., 281 F.3d 1350, 1366-367 (11th Cir. 2002).
54 E.g., United States v. Trupiano, 11 F.3d 769, 773-74 (8th Cir. 1993)(Congress did not purport to require absolute or
total continuity in gambling operations. Consistent with this, substantially continuous has been read not to mean every
day. The operation, rather, must be one that was conducted upon a schedule of regularity sufficient to take it out of the
casual nonbusiness category).
55 Compare, United States v. Nicolaou, 180 F.3d 565, 568 (4th Cir. 1999)(the five-person requirement must be satisfied
in conjunction with the third element. That is . . . section 1955 covers only those gambling operations that involve at all
times during some thirty day period at least five persons . . . or that involve at least five persons on any single day on th
which it had gross revenues of $2,000), with, United States v. Boyd, 149 F.3d 1062, 1064-65 (10 Cir. 1998)(“the
government is not required to demonstrate the involvement of five or more persons for a continuous period of more
than thirty days to support a conviction under §1955, but rather need only demonstrate that the operation operated for a
continuous period of thirty days and involved five or more persons at some relevant time).





There is no such diversity of opinion on the question of whether section 1955 lies within the
scope of Congress’ legislative authority under the Commerce Clause. The Supreme Court’s
decision in United States v. Lopez, 514 U.S. 549 (1996), finding the Gun Free School Zone Act
(18 U.S.C. 922(q)) beyond the bounds of Congress’ Commerce Clause power, stimulated a host
of appellate decisions here and elsewhere. In the case of section 1955, Lopez challenges have
been rejected with the observation that, unlike the statute in Lopez, section 1955 (a) involves the
regulation of a commercial activity (a gambling business), (b) comes with jurisdictional elements
selected to reserve prosecution to those endeavors likely to substantially affect interstate
commerce (five participants in a substantial gambling undertaking), and (c) was preceded by
Congressional findings evidencing the impact of substantial gambling operations upon interstate 56
commerce.
The accomplice and conspiratorial provisions attend violations of section 1955 as they do
violations of the Wire Act. Although frequently difficult to distinguish in a given case, the
difference is essentially a matter of depth of involvement. “[T]o be guilty of aiding and abetting a
section 1955 illegal gambling business . . . the defendant must have knowledge of the general
scope and nature of the illegal gambling business and awareness of the general facts concerning
the venture . . . [and he] must take action which materially assists in ‘conducting, financing,
managing, supervising, directing or owning’ the business for the purpose of making the business th
succeed,” United States v. Hill, 55 F.3d 1197, 1201-202 (6 Cir. 1995). Unlike conspiracy, one
may only be prosecuted for aiding and abetting the commission of a completed crime; “before a
defendant can be found guilty of aiding and abetting a violation of section 1955 a violation of
section 1955 must exist . . . [and] aiders and abettors cannot be counted as one of the statutorily
required five persons,” id. at 1204.
As a general rule, a federal conspiracy exists when two or more individuals agree to commit a 57
federal crime and one of them commits some overt act in furtherance of their common scheme.
“A conspiracy may exist even if a conspirator does not agree to commit or facilitate each and
every part of the substantive offense. The partners in the criminal plan must agree to pursue the
same criminal objective and may divide up the work, yet each is responsible for acts of each
other. If the conspirators have a plan which calls for some conspirators to perpetrate the crime and 58
others to provide support, the supporters are as guilty as the perpetrators.” Conspiracy is a
separate crime and thus conspirators may be convicted of both substantive violations of section 59

1955 and conspiracy to commit those violations. In fact, under the Pinkerton doctrine,


coconspirators are liable for conspiracy, the crime which is the object of the conspiracy (when it
is committed), and any other reasonably foreseeable crimes of their confederates committed in 60
furtherance of the conspiracy.

56 E.g., United States v. Riddle, 249 F.3d 529, 538-39 (6th Cir. 2001); United States v. Lee, 173 F.3d 809, 810-11 (11th
Cir. 1999); United States v. Threadgill, 172 F.3d 357, 371-72 & n.12 (5th Cir. 1999); United States v. Ables, 167 F.3d th
1021, 1026-28 (6 Cir. 1999)(also rejecting the suggestion that section 1955 exceeded the reach of Congress under the
Commerce Clause because it intruded into an area traditionally reserved to the states); United States v. Boyd, 149 F.3d thth
1062, 1066 (10 Cir. 1998); United States v. Zizzo, 120 F.3d 1338, 1350 (7 Cir. 1998); United States v. Wall, 912 F.3d th
1444, 1445-452 (6 Cir. 1996).
57 United States v. Falcone, 311 U.S. 205, 210 (1941); United States v. Blackwell, 459 F.3d 739, 760 (6th Cir. 2006);
United States v. Yehling, 456 F.3d 1236, 1240 (10th Cir. 2006); United States v. Soy, 454 F.3d 766, 768 (7th Cir. 2006).
58 Salinas v. United States, 522 U.S. 52, 63-4 (1997).
59 Iannelli v. United States, 420 U.S. 770 (1975); United States v. Jimenez Recio, 537 U.S. 270, 274 (2003).
60 Pinkerton v. United States, 328 U.S. 640, 645-48 (1946); United States v. Woodard, 459 F.3d 1078, 1084 (11th Cir.
2006); United States v. Carter, 449 F.3d 1287, 1298 (D.C.Cir. 2006); United States v. Ruiz, 446 F.3d 762, 769 (8th Cir.
(continued...)





The application of section 1955 to offshore gambling operations that take wagers from bettors in
the United States involves two questions. First, does state law proscribing the gambling in
question apply when some of the elements of the offense are committed outside its jurisdiction?
Second, did Congress intend section 1955 to apply beyond the confines of the United States?
Section 1955 can only apply overseas when based on an allegation that the gambling in question
is illegal under a state law whose reach straddles jurisdictional lines. For example, a statute that
prohibits recording bets (bookmaking) in Texas cannot be used against a gambling business
which records bets only in Jamaica or Dominican Republic even if the bets are called in from th
Texas, United States v. Truesdale, 152 F.3d 443, 446-49 (5 Cir. 1998) (rejecting the argument
that the gambling was illegal under a provision of Texas law not mentioned in indictment or the
jury charge). On the other hand, an overseas gambling business may find itself in violation of
section 1955 if it accepts wagers from bettors in New York, because New York law considers the 61
gambling to have occurred where the bets are made, inter alia.
Whether a federal criminal statute applies overseas is a matter of Congressional intent.62 The
intent is most obvious where Congress has expressly stated that a provision shall have
extraterritorial application, e.g., 18 U.S.C. 2381 (relating to treason committed in the United
States “or elsewhere”).
In the absence of an explicit statement, the courts use various construction aids to divine
Congressional intent. Unless some clearer indication appears, Congress is presumed to have 63
intended its laws to apply only within the United States. The courts have recognized contrary
indications under several circumstances. Congress will be thought to have intended a criminal
proscription to apply outside the United States where one of the elements of the offense, like the 64
commission of an overt act in furtherance of a conspiracy, occurs in the United States. Similarly,
Congress will be thought to have intended to outlaw overseas crimes calculated to have an impact
in the United States, for example, false statements made abroad in order to gain entry into the 65
United States. Finally, Congress will be thought to have intended extraterritorial application for

(...continued)
2006).
61 People v. World Interactive Gaming Corp., 1999 WL 591995, slip at 5 (N.Y.S.Ct.)(July 22, 1999)(Respondents
argue that the Court lacks subject matter jurisdiction, and that Internet gambling falls outside the scope of New York
state gambling prohibitions, because the gambling occurs outside of New York state. However, under New York Penal
Law, if the person engaged in gambling is located in New York, then New York is the location where the gambling
occurred (See Penal Law §225.02(2)). Here, some or all of those funds in an Antiguan bank account are staked every
time the New York user enters betting information into the computer. It is irrelevant that Internet gambling is legal in
Antigua. The act of entering the bet and transmitting the information from New York via the Internet is adequate to
constitute gambling activity within New York state).
62 EEOC v. Arabian American Oil Co., 499 U.S. 244, 248 (1991)(Congress has the authority to enforce its laws
beyond the territorial boundaries of the United States. Whether Congress has in fact exercised that authority . . . is a
matter of statutory construction”); Foley Brothers v. Filardo, 336 U.S. 281, 284-85 (1949) (The question . . is not the
power of Congress to extend the . . . law to . . . foreign countries. Petitioners concede that such power exists. The th
question is rather whether Congress intended to make the law applicable); In re Simon, 153 F.3d 991, 995 (9 Cir.
1998); United States v. Delgado-Garcia, 374 F.3d 1337, 1345 (D.C.Cir. 2004); see generally, CRS Report 94-166,
Extraterritorial Application of American Criminal Law.
63 Small v. United States, 544 U.S. 385, 388-89 (2005); Sale v. Haitian Centers Council, Inc., 509 U.S. 155, 174
(1993); Steele v. Bulova Watch Co., 344 U.S. 280, 285 (1952).
64 United States v. MacAllister, 160 F.3d 1304, 1308 (11th Cir. 1998).
65 Ford v. United States, 273 U.S. 593, 620-21 (1927)(Acts done outside a jurisdiction, but intended to produce and
producing detrimental effects within it, justify a State in punishing the cause of the harm as if he had been present at the
(continued...)





a criminal statute where its purpose in enacting the statute would otherwise be frustrated, for 66
instance, the theft of United States property overseas.
There is a countervailing presumption interwoven among these interpretive devices. Congress is
presumed not to have intended any extraterritorial application that would be contrary to 67
international law. International law in the area is a matter of reasonableness, of minimal 68
contacts, traditionally described as permitting geographical application of a nation’s laws under
five principles: a country’s laws may be applied within its own territory (territorial principal); a
country’s laws may be applied against its own nationals wherever they are located (nationality
principle); a country’s laws may be applied to protect it from threats to its national security
(protective principle); a country’s laws may be applied to protect its citizens overseas (passive
personality principle); and a country’s laws may be applied against crimes repugnant to the law of 69
nations such as piracy (universal principle).
Section 1955 does not say whether it applies overseas. Yet an offshore illegal gambling business
whose customers where located in the United States seems within the section’s domain because of
the effect of the misconduct within the United States.
The operation of an illegal gambling business using the Internet may easily involve violations of 70
the Travel Act, 18 U.S.C. 1952, as several writers have noted. Like section 1955, Travel Act
convictions result in imprisonment for not more than 5 years and/or fines of the greater of not
more than twice the gain or loss associated with the offense or $250,000 ($500,000 for an
organization), 18 U.S.C. 1955(a), 3571(d). The Act may serve as the foundation for a prosecution
under the money laundering statutes, 18 U.S.C. 1956 and 1957, and RICO, 18 U.S.C. 1961-1963.

(...continued)
effect”); United States v. Larsen, 952 F.2d 1099, 1100-101 (9th Cir. 1991); United States v. Hill, 279 F.3d 731, 739-40 th
(9 Cir. 2002).
66 United States v. Bowman, 260 U.S. 94, 98 (1922)(“Other [crimes] are such that to limit their locus to the strictly
territorial jurisdiction would be greatly to curtail the scope and usefulness of the statute and leave open a large
immunity for frauds as easily committed by citizens . . . in foreign countries as at home. In such cases, Congress has
not thought it necessary to make specific provision in the law that the locus shall include . . . foreign countries, but
allows it to be inferred from the nature of the offense); Blackmer v. United States, 284 U.S. 421, 438 (1932)(The
jurisdiction of the United States over its absent citizen, so far as the binding effect of its legislation is concerned, is a
jurisdictional in personam, as he is personally bound to take notice of the laws that are applicable to him and to obey th
them”); United States v. Vasquez-Velasco, 15 F.3d 833, 839 (9 Cir. 1994); United States v. Delgado-Garcia, 374 F.3d
1337, 1345-347 (D.C.Cir. 2004).
67 Weinberger v. Rossi, 456 U.S. 25, 32 (1982)(It has been a maxim of statutory construction since the decision in
Murray v. the Charming Betsy, that an act of Congress ought never to be construed to violate the law of nations, if any th
other possible construction remains); United States v. Dawn, 129 U.S. 878, 882 (7 Cir. 1997); United States v.
Yousef, 327 F.3d 56, 96 (2d Cir. 2003).
68 ReSTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES §§401 to 423 (1986 & 2006 Supp.).
69 Jurisdiction with Respect to Crime, 29 AMERICAN JOURNAL OF INTERNATIONAL LAW (SUPP.) 439, 445 (1935).
70 Gottfried, The Federal Framework for Internet Gambling, 10 RICHMOND JOURNAL OF LAW AND TECHNOLOGY 26, 52
(2004); Do Not Bet on Unilateral Prohibition of Internet Gambling to Eliminate Cyber-Casinos, 1999 UNIVERSITY OF
ILLINOIS LAW REVIEW 1045, 1057; Schwartz, The Internet Gambling Fallacy Craps Out, 14 BERKELEY TECHNOLOGY
LAW JOURNAL 1021, 1028-29 (1999); General Accounting Office [now the Government Accountability Office],
Internet Gambling: An Overview of the Issues 11 (Dec. 2002).





It has neither the service termination features of the Wire Act nor the forfeiture features of section

1955.


The Travel Act’s elements cover anyone who:
I.A. travels in interstate or foreign commerce, or
B. uses any facility in interstate or foreign commerce, or
C. uses the mail
II. with intent
A. to distribute the proceeds of
i. any business enterprise involving unlawful activities (including gambling) in violation
of the laws in which it is conducted or of the laws of the United States; or
ii. any act which is indictable as money laundering; or
B. to otherwise
i. promote,
ii. manage,
iii. establish,
iv. carry on, or
v. facilitate the promotion, management, establishment, or carrying on, of any business
enterprise involving unlawful activities (including gambling) in violation of the laws
in which it is conducted or of the laws of the United States, or any act which is
indictable as money laundering; and
III. thereafter so
A. distributes the proceeds from any business enterprise involving gambling or from any
act indictable as money laundering, or
B. promotes, manages, establishes, carries on, or facilitates the promotion, management,
establishment, or carrying on of any business enterprise involving unlawful activities
(including unlawful gambling) or any act indictable as money laundering.
The courts often abbreviate their statement of the elements: “The government must prove (1)
interstate travel or use of an interstate facility; (2) with the intent to . . . promote . . . an unlawful
activity and (3) followed by performance or attempted performance of acts in furtherance of the 71
unlawful activity.”

71 United States v. Escobar-de-Jesus, 187 F.3d 148, 177 (1st Cir. 1999); United States v. Bankston, 182 F.3d 296, 315
(continued...)





The Supreme Court determined some time ago that the Travel Act does not apply to the simple
customers of an illegal gambling business, Rewis v. United States, 401 U.S. 808, 811 (1971), 72
although interstate solicitation of those customers may certainly be covered, 401 U.S. at 811.
When the Act’s jurisdictional element involves mail or facilities in interstate or foreign 7374
commerce, rather than interstate travel, evidence that a telephone was used, or an ATM, or the 7576
facilitates of an interstate banking chain will suffice. The government is not required to show
that the defendant used the facilities himself or that the use was critical to the success of the 77
criminal venture. It is enough that he caused them to be used and that their employment was 78
useful for his purposes.
A criminal business enterprise, as understood in the Travel Act, “contemplates a continuous
course of business – one that already exists at the time of the overt act or is intended thereafter. 79
Evidence of an isolated criminal act, or even sporadic acts, will not suffice,” and it must be
shown to be involved in an unlawful activity outlawed by a specifically identified state or federal 80
statute. Finally, the government must establish some overt act in furtherance of the illicit 81
business committed after the interstate travel or the use of the interstate facility.

(...continued)
(5th Cir. 1999); United States v. Montford, 27 F.3d 137, 138 n.1 (5th Cir. 1994); United States v. Xiong, 262 F.3d 672, thth
676 (7 Cir. 2001); United States v. Burns, 298 F.3d 523, 537 (6 Cir. 2002); United States v. Welch, 327F.3d 1081, thst
1090(10 Cir. 2003); United states v. Nishnianidze, 342 F.3d 6, 15 (1 Cir. 2003). When the violation is a distribution
of profits rather than promotional offense, the second element in the abbreviated list of elements is changed to “with the th
intent to distribute the proceeds of an unlawful activity,United States v. Hinojosa, 958 F.2d 624, 629 (5 Cir. 1992).
72 Unlike 18 U.S.C. 1953 (interstate transportation of certain gambling paraphernalia), section 1952 does not exclude
the interstate or foreign shipment of newspapers (whether soliciting customers or otherwise) from the activities that
may trigger the section’s jurisdictional element, see e.g., Erlenbaugh v. United States, 409 U.S. 239 (1972)(upholding a
conviction for violation of section 1952 which took the form of interstate delivery newspapersscratch sheets to out of
state bookies).
73 United States v. Nishnianidze, 342 F.3d 6, 15 (1st Cir. 2003); United States v. Baker, 227 F.3d 955, 962 (7th Cir.
2000); United States v. Jenkins, 943 F.2d 167, 172 (2d Cir. 1991); United States v. Graham, 856 F.2d 756, 760-61 & th
n.1 (6 Cir. 1988).
74 United States v. Baker, 82 F.3d 273, 275 (8th Cir. 1996).
75 United States v. Rogers, 387 F.3d 925, 935 (7th Cir. 2004); United States v. Auerbach, 913 F.2d 407, 410 (7th Cir.
1990).
76 Of course, interstate travel will also suffice, United States v. Xiong, 262 F.3d 672, 676 (7th Cir. 2001).
77 United States v. Baker, 82 F.3d at 275; United States v. Auerbach, 913 F.2d at 410.
78 United States v. Baker, 82 F.3d at 275-76; United States v. McNeal, 77 F.3d 938, 944 (7th Cir. 1996); United States v.
Houlihan, 92 F.3d 1271, 1292 (1st Cir. 1996).
79 United States v. Roberson 6 F.3d 1088, 1094 (5th Cir. 1993); see also, United States v. James, 210 F.3d 1342, 1345
(11th Cir. 2000); United States v. Saget, 991 F.2d 702, 712 (11th Cir. 1993)(If the defendant engages in a continuous
course of cocaine distribution rather than a sporadic or casual course of conduct, then the statutory requirement of a
business enterprise involving narcotics is satisfied); United States v. Iennaco, 893 F.2d 394, 398 (D.C.Cir. 1990).
80 United States v. Griffin, 85 F.3d 284, 287-88 (7th Cir. 1996); United States v. Campione, 942 F.2d 429, 433-36 (7th
Cir. 1991); United States v. Jones, 909 F.2d 533, 536-39 (D.C.Cir. 1990).
81 United States v. Jenkins, 943 F.2d 167, 173 (2d Cir. 1991); United States v. Admon, 940 F.2d 1121, 1125 (8th Cir.
1991); United States v. Burns, 298 F.3d 523, 537-38 (6th Cir. 2002); United States v. Nishnianidze, 342 F.3d 6, 15 (1st
Cir. 2003).





Accomplice and coconspirator liability, discussed earlier, apply with equal force to the Travel 82
Act.
In the case of Internet gambling, the jurisdictional element of the Travel Act might be established
at a minimum either by reference to the telecommunications component of the Internet, to
shipments in interstate or foreign commerce (in or from the United States) associated with
establishing operations on the Internet, to any interstate or foreign nexus to the payment of the
debts resulting from the gambling, or to any interstate or foreign distribution of the proceeds of
such gambling.
The Act would only apply to “business enterprises” involved in illegal gaming, so that e-mail
gambling between individuals would likely not be covered. And Rewis, supra, seems to bar
prosecution of an Internet gambling enterprise’s customers as long as they remain mere 83
customers. But an Internet gambling venture that constitutes an illegal gambling business for
purposes of section 1955, supra, and is engaged in some form of interstate or foreign commercial
activity in furtherance of the business will almost inevitably have included a Travel Act violation.
Illegal gambling may trigger the application of RICO provisions. Section 1955, the Wire Act, the
Travel Act, and any state gambling felony are all RICO predicate offenses, which expose
offenders to imprisonment for not more than twenty years and/or a fine of greater of not more
than $250,000 (not more than $500,000 for an organization) or twice the gain or loss associated
with the offense, 18 U.S.C. 1963, 3571. An offender’s crime-tainted property may be confiscated,
and he may be liable to his victims for triple damages and subject to other sanctions upon the
petition of the government, 18 U.S.C. 1964. RICO makes it a federal crime for any person to:
I. conduct or participate, directly or indirectly, in the conduct of
II. the affairs of an enterprise
III. engaged in or the activities of which affect, interstate or foreign commerce
IV. A. through the collection of an unlawful debt, or
B. through a pattern of racketeering activity, defined to include:
1. any act of gambling which is chargeable under State law and punishable by
imprisonment or more than 1 year;

82 United States v. Childress, 58 F.3d at 721 (D.C.Cir. 1995)(citing the Pinkerton principle of coconspirator liability);
see also, United States v. Auerbach, 913 F.2d at 410 (7th Cir. 1990) (coconspirator liability); United States v. Rogers, th
387 F.3d 925, 935 (7 Cir. 2004)(aiding and abetting); United States v. Lee, 359 F.3d 194, 209 (3d Cir. 2004)(aiding th
and abetting); United States v. Pardue, 983 F.2d 943, 945-46 (8 Cir. 1993)(aiding and abetting); United States v. th
Dischner, 974 F.2d 1502, 1521 (9 Cir. 1992)(aiding and abetting).
83 Contra, Blackjack or Bust: Can U.S. Law Stop Internet Gambling? 16 LOYOLA OF LOS ANGELES ENTERTAINMENT
LAW JOURNAL at 675 (The Travel Act applies not only to Internet casinos, but it also seems to apply to players who
use interstate facilities for the transportation of unlawful activities [i.e., their wagers])(the JOURNAL article does not
discuss Rewis).





2. any act which is indictable under 18 U.S.C. 1084 (Wire Act);


3. any act which is indictable under 18 U.S.C. 1952 (Travel Act);


4. any act which is indictable under 18 U.S.C. 1955 (relating to conducting an illegal 84


gambling business, 18 U.S.C. 1962(c).
“To establish the elements of a substantive RICO offense, the government must prove (1) that an
enterprise existed; (2) that the enterprise affected interstate or foreign commerce; (3) that the
defendant associated with the enterprise; (4) that the defendant participated, directly or indirectly,
in the conduct of the affairs of the enterprise; and (5) that the defendant participated in the
enterprise through a pattern of racketeering activity by committing at least two racketeering
(predicate) acts [e.g., 18 U.S.C. 1084 (Wire Act), 18 U.S.C. 1952 (Travel Act), 18 U.S.C. 1955
(illegal gambling business)]. To establish the charge of conspiracy to violate the RICO statute, the
government must prove, in addition to elements one, two and three described immediately above,
that the defendant objectively manifested an agreement to participate . . . in the affairs of the 85
enterprise.” This statement of the elements addresses the more common RICO prosecution
involving a pattern of racketeering activity (i.e., predicate offenses), but the government is under
no obligation to prove pattern if the underlying misconduct is “the collection of an unlawful 86
debt.”
The “person” who commits a RICO offense need not be a human being, but may be “any
individual or entity capable of holding a legal or beneficial interest in property,” 18 U.S.C.

1961(3). The “enterprise” element is defined with comparable breath, embracing “any individual,


partnership, corporation, association, or other legal entity, and any union or group of individuals
associated in fact although not a legal entity,” 18 U.S.C. 1961(4). In spite of their sweeping scope,
the elements are distinct and a single defendant may not be simultaneously charged as both the 87
“person” and the “enterprise” under 18 U.S.C. 1962(c). Subject to this limitation, however, a
RICO enterprise may be formal or informal, legal or illegal. In order for a group associated in fact
to constitute a RICO enterprise, it must be characterized by “an ongoing organization . . . and . . . 88
evidence that [its] various associates function as a continuing unit.”

84 Other subsections of 18 U.S.C. 1962 outlaw acquire or maintaining control of a commercial enterprise through
collection of an unlawful debt or pattern of racketeering and proscribe conspiracy to commit a RICO offense, 18 U.S.C.
1962(a),(b),(d); see generally, CRS Report 96-950, RICO: A Brief Sketch.
85 United States v. Darden, 70 F.3d 1507, 1518 (8th Cir. 1995); see also, United States v. Pipkins, 378 F.3d 1281, 1288
(11th Cir. 2004); United States v. Delgado, 401 F.3d 290, 297 (5th Cir. 2005) United States v. Olson, 450 F.3d 655, 663-th
64 (7 Cir. 2006).
86 United States v. Tocco, 200 F.3d 401, 426 (6th Cir. 2000)(indictment based on the collection of illegal gambling
proceeds). Although the “collection of unlawful debts” may clearly include loan sharking (18 U.S.C. 891-896 relating
to extortionate credit transactions), the collection of an unlawful debt need not involve the violence or the threat of
violence required of extortionate credit transactions.
87 Wagh v. Metris Direct, Inc., 363 F.3d 821, 830 (9th Cir. 2003); Whalen v. Winchester Production Co., 319 F.3d 225,
229 (5th Cir. 2003); United States v. Fairchild, 189 F.3d 769, 777 (8th Cir. 1999); Anatian v. Coutts Bank (Switzerland)
Ltd., 193 F.3d 85, 88-9 (2d Cir. 1999); Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001)(holding,
however, that the “person and the individual through whom a corporate enterprises acts may be the same and need not
be distinct).
88 United States v. Lee, 374 F.3d 637, 647 (8th Cir. 2004); United States v.Pipkins, 378 F.3d 1281, 1289 (11th Cir.
2004); United States v. Morales, 185 F.3d 74, 80 (2d Cir. 1999), quoting, United States v. Turkette, 452 U.S. 576, 583 th
(1981); see also, United States v. Torres, 191 F.2d 799, 805-6 (7 Cir. 1999)(“A RICO enterprise is an ongoing
structure of persons associated thought time, joined in purpose, and organized in a manner amenable to hierarchical or
(continued...)





The interstate commerce element of the RICO offense may be established either by evidence that
the enterprise has conducted its affairs in interstate commerce or foreign commerce or has 89
engaged in activities that affect interstate commerce or foreign commerce.
The “pattern of racketeering activity” element demands the commission of at least two predicate
offenses, 18 U.S.C. 1961(5), which must be of sufficient relationship and continuity to be 90
described as a “pattern.” Related crimes, for pattern purposes, are marked by “the same or
similar purposes, results, participants, victims, or methods of commission, or otherwise are 91
interrelated by distinguishing characteristics and are not isolated events.”
The “continuity” of predicate offenses may be shown in two ways, either by prove of the regular
occurrences related misconduct over a period of time in the past (closed ended) or by evidence of
circumstances suggesting that if not stopped by authorities they would have continued in the 92
future (open ended).
The courts have been reluctant to find the continuity required for a RICO pattern for closed ended
enterprises (those with no threat of future predicate offenses) unless the enterprise’s activities 93
spanned a fairly long period of time. Open-ended continuity (found where there is a threat of
future predicate offenses) is nowhere near as time sensitive and is often found where the

(...continued)
consensual decision-making . . . The continuity of an informal enterprise and the differentiation among roles can
provide the requisite structure to prove the elements of the enterprise”); United States v. Richardson, 167 F.3d 621, 625
(D.C.Cir. 1999).
89 United States v. Robertson, 514 U.S. 669, 671 (1995); proof of even a de minimis effect on interstate commerce is
sufficient where the enterprise is engaged in economic activity, United Sstatesj v. Johnson, 440 F.3d 832, 841 (7th Cir. thst
2006); Waucaush v. Untied States, 380 F.3d 251, 256 (6 Cir. 2004); United States v. Cianci, 378 F.3d 71,83 (1 Cir. thth
2004); United States v. Rodriguez, 360 F.3d 949, 955 (9 Cir. 2004); United States v. Gray, 137 F.3d 765, 773 (4 Cir.
1998).
90A pattern is not formed by sporadic activity. . . . [A] person cannot be subjected to the sanctions [of RICO] simply
for committing two widely separate and isolated criminal offenses. Instead, the term `pattern’ itself requires the
showing of a relationship between the predicates and of the threat of continuing activity. It is this factor of continuity
plus relationship which combines to produce a pattern, H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229,
239 (1989)(emphasis of the Court); United States v. Polanco, 145 F.3d 536, 541 (2d Cir. 1998); United States v. st
Cianci, 378 F.3d 71, 88 (1 Cir. 2004). Prior conviction of a predicate offense, however, is not required or even usual, th
BancOklahoma Mortgage Corp. v. Capital Title Co., 194 F.3d 1089, 1102 (10 Cir. 1999); cf., Sedima, S.P.R.L. v.
Imrex Co., Inc., 473 U.S. 479, 488-93 (1985)(a private cause of action under RICO does not require the prior
conviction of a defendant).
91 H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. at 240, quoting 18 U.S.C. 3575(e); United States v. Keltner,
147 F3.d 662, 669 (8th Cir. 1998); United States v. Torres, 191 F.3d 799, 806 (7th Cir. 1999); United States v. Bruno,
383 F.3d 65, 83-4 (2d Cir. 2004).
92 H.J.,Inc. v. Northwestern Bell Tel.Co., 492 U.S. 229, 241 (1988)(continuityis both a closed- and open-ended
concept, referring either to a closed end period of repeated conduct, or to past conduct that by its nature projects into
the future with a threat of repetition”); First Capital Asset Management v. Satinwood, Inc., 358 F.3d 159, 180 (2d Cir. th
2004); Turner v. Cook, 362 F.3d 1219, 1229 (9 Cir. 2004).
93 First Capital Asset Management v. Satinwood, Inc., 358 F.3d at 181-82 (2d Cir. 2004)(this Court has never found a
closed-ended pattern where the predicate acts spanned fewer than two years”); Roger Whitmores Automotive Services, th
Inc. v. Lake Country, 424 F.3d 659, 672-74 (7 Cir. 2005)(2 years with relatively limited activity involving a relatively th
few individuals, insufficient); Jackson v. Bellsouth Telecommunications, 372 F.3d 1250, 1267 (11 Cir. 2004)(9 th
months, insufficient); but see, United States v. Hively, 437 F.3d 753, 764-65 (8 Cir. 2006)(over a year with indications
of intent to continue, sufficient).





predicates consist of murder, drug dealing or other law-ignoring crimes or is part of the 94
enterprise’s regular way of doing business.
The RICO conspiracy and accomplice branches of the law are notable for at least two reasons.
RICO conspiracies are outlawed in a subsection of section 1962, 18 U.S.C. 1962(d), that imposes 95
no overt act requirement. The crime is complete upon the agreement to commit a RICO offense. 96
Second, at least in some circuits, RICO accomplices are not subject to RICO tort liability.
Congress has enacted several statutes to deal with money laundering. It would be difficult for an
illegal Internet gambling business to avoid either of two of the more prominent, 18 U.S.C. 1956
and 1957, both of which involve financial disposition of the proceeds of various state and federal
crimes, including violation of 18 U.S.C. 1084 (Wire Act), 18 U.S.C. 1955 (illegal gambling
business), 18 U.S.C. 1952 (Travel Act), or any state gambling law (if punishable by imprisonment
for more than one year), 18 U.S.C. 1956(7)(A), 1957(f)(3), 1961(1). In fact, the courts have 97
frequently upheld money laundering convictions predicated upon various gambling offenses.
The crimes under section 1956 are punishable by imprisonment for not more than twenty years or
a fine of the greater of not more than twice value of the property involved in the transaction or not
more than $500,000, 18 U.S.C. 1956(a); those under section 1957 carry a prison term of not more
than ten years or a fine of the greater of twice the amount involved in the offense or not more than

94 United States v. Torres, 191 F.3d 799, 808 (7th Cir. 1999)(As other courts of appeals have noted, in cases where the
acts of the defendant or the enterprise were inherently unlawful, such as murder or obstruction of justice, and where in
pursuit of inherently unlawful goals, such as narcotics trafficking or embezzlement, the courts generally have
concluded that the requisite threat of continuity was adequately established by the nature of the activity, even though
the period spanned by the racketeering activity was short”). Open ended continuity may also be found where the
evidence suggests that only the intervention of law enforcement authorities closed down the enterprise, United States v. thth
Delgado, 399 F.3d 290, 298 (5 Cir. 2005); Jackson v. Bellsouth Telecommunications, 372 F.3d 1250, 1267 (11 Cir. st
2004); United States v. Connolly, 341 F.3d 16, 30 (1 Cir. 2003); United States v. Richardson, 167 F.3d 621, 626-27
(D.C.Cir. 1999).
95 Salinas v. United States, 522 U.S. 52, 63 (1997).
96 Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644, 656-68 (3d Cir. 1998); Jubelirer v. MasterCard
International, Inc., 68 F.Supp.2d 1049, 1053-54 (D.Wis. 1999) (dismissing RICO claim against credit card company,
bank and Internet casino on the grounds, among others, that there is no RICO civil liability for those who aid and abet a
RICO violation); In re MasterCard Internaitonal Inc., Internet Gambling Litigation, 132 F.supp.2d 468, 493-95 th
(E.D.La. 2001)(same), aff’d, 313 F.3d 257 (5 Cir. 2002); but see, American Automotive Accessories, Inc. v. Fishman,
991 F.Supp. 987, 993 (N.D.Ill. 1998)(to be held liable as an aider and abettor, a person must in some sort associate
himself with the venture, participate in it as something he wishes to bring about, and seek by his action to make it
succeed”)(noting that the Seventh Circuit has yet to “comment on the possibility of aiding and abetting liability in civil
RICO actions”); Simon v. Weaver, 327 F.Supp.2d 258, 262 (S.D.N.Y. 2004)(In order to properly allege a claim for
aiding and abetting [a RICO violation], plaintiffs must show . . .”).
97 Santos v. United States, 461 F.3d 886 (7th Cir. 2006)(upholding convictions under18 U.S.C. 1955 and 1956); United
States v. Awada, 425 F.3d 522 (8th Cir. 2005)(same); United States v. Tedder, 403 F.3d 836 (7th Cir. 2005)(upholding th
convictions under 18 U.S.C. 1084, 1956 and 1957); United States v. Mick, 263 F.3d 553 (6 Cir. 2001)(upholding th
convictions under 18 U.S.C. 1952, 1955, 1956, and 1957); United States v. Ables, 167 F.3d 1021 (6 Cir. th
1999)(upholding convictions under 18 U.S.C. 1955, 1956, and 1957); United States v. Hill, 167 F.3d 1055 (6 Cir. th
1999)(same); United States v. Owens, 159 F.3d 221 (6 Cir. 1998) (upholding convictions under 18 U.S.C. 1952, 1955, th
and 1956); United States v. Boyd, 149 F.3d 1062 (10 Cir. 1998)(upholding convictions under 18 U.S.C. 1955 and
1956). For a more extensive discussion of section 1956 see CRS Report RL33315, Money Laundering: An Overview of
18 U.S.C. 1956 and Related Federal Criminal Law; Twenty-First Survey of White Collar Crime: Money Laundering,
43 AMERICAN CRIMINAL LAW REVIEW 739 (2006); Validity, Construction, and Application of 18 USCS §1956, Which
Criminalizes Money Laundering, 121 ALR FED 525 (1994 & 2006 Supp.).





$250,000 (not more than $500,000 for an organization), 18 U.S.C. 1957(b), 3571. Any property
involved in a violation of either section is subject to the civil and criminal forfeiture provisions of

18 U.S.C. 981, 982.


Section 1956 is really several distinct crimes: (1) laundering with intent to promote an illicit
activity such as an unlawful gambling business; (2) laundering to evade taxes; (3) laundering to
conceal or disguise; (4) structuring financial transactions (smurfing) to avoid reporting
requirements; (5) international laundering; and (5) “laundering” conduct by those caught in a law
enforcement sting.
In its most basic form the promotion offense essentially involves plowing the proceeds of crime
back into an illegal enterprise. Like most of the crimes under section 1956, the elements of the
promotion offense begin with a financial transaction and the knowledge that the proceeds
involved flow from a predicate offense like illegal gambling:
I. knowing
A. that the property involved in a financial transaction,
B. represents the proceeds of some form of unlawful activity,
II. A. conducts or
B. attempts to conduct such a financial transaction
III. which in fact involves the proceeds of specified unlawful activity (A)(i)
IV. with the intent to promote the carrying on of specified unlawful activity. (18 U.S.C.
1956(a)(1)(A)(i)).
The knowledge element is the subject to special definition which allows a conviction without the
necessity of proving that the defendant know the exact particulars of the underlying offense or 98
even its nature. The “proceeds” may be tangible or intangible, e.g., cash or debt, things of value 99
or things with no intrinsic value, e.g., checks written on depleted accounts.

98 “The term ‘knowing that the property involved in a financial transaction represents the proceeds of some form of
unlawful activity means that the person knew the property involved in the transaction represented proceeds from some
form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law,
regardless of whether or not such activity is specified in paragraph (7), 18 U.S.C. 1956(c)(1); United States v. Rivera-stth
Rodriguez, 318 F.3d 268, 271-72 (1 Cir. 2003); United States v. Hill, 167 F.3d 1055, 1065-68 (6 Cir. 1999).
99 United States v. Akintonbi, 159 F.3d 401, 403 (9th Cir. 1998). There is some dispute over whether the term includes
revenues, or only profits, or something in between, United States v. Grasso, 381 F.3d, 160, 166-69 (3d Cir. th
2004)(citing cases reflecting conflicting views); see also, Santos v. United States, 461 F.3d 886, 889-93 (7 Cir.
2006)(same).





“Financial transaction” for purposes of section 1956 make take virtually any shape that involves 100
the disposition of something represent the proceeds of an underlying crime, including 101
disposition as informal has handing cash over to someone else.
The jurisdictional requirements of the section may be satisfied in two ways – with a transaction
which affects commerce or with a financial institution whose activities affect commerce. In either
case, the effect on interstate or foreign commerce need be no more than de minimis to satisfy the 102
jurisdictional requirement.
The “promotion” element of the offense can be satisfied by proof that the defendant used the 103
proceeds to continue a pattern of criminal activity or to enhance the prospect of future criminal 104
activity.
The “concealment” offense shares several common elements with the other offenses in section 105
1956. The courts have made it clear that conviction for the concealment offense requires proof

100 “The termfinancial transaction means (A) a transaction which in any way or degree affects interstate or foreign
commerce (i) involving the movement of funds by wire or other means or (ii) involving one or more monetary
instruments, or (iii) involving the transfer of title to any real property, vehicle, vessel, or aircraft, or (B) a transaction
involving the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign
commerce in any way or degree, 18 U.S.C. 1956(c)(4).
The term ‘transaction’ includes a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition, and with
respect to a financial institution includes a deposit, withdrawal, transfer between accounts, exchange of currency, loan,
extension of credit, purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument, use of a
safe deposit box, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever
means effected, 18 U.S.C. 1956(c)(3).
101 United States v. Gough, 152 F.3d 1172, 1173 (9th Cir. 1998); United States v. Garcia Abrego, 141 F.3d 142, 160 (5th
Cir. 1998); United States v. Roy, 375 F.3d 21, 23-4 (1st Cir. 2004)(exchange between individuals of $100 bills for
currency of smaller denominations to facilitate drug trafficking); United States v. Gotti, 459 F.3d 296, 335-36 (2d Cir.
2006) (mere receipt of funds constitutes a financial transaction).
102 United States v. Ables, 167 F.3d 1021, 1029 (6th Cir. 1999); United States v. Owens, 167 F.3d 739, 755 (1st Cir.
1999); United States v. Bollin, 264 F.3d 391, 408 (4th Cir. 2001); United States v. Gotti, 459 F.3d 296, 336 (2d Cir. th
2006); United States v. Kelley, 461 F.3d 817, 826 (6 Cir. 2006).
103 United States v. Masten, 170 F.3d 790, 797-98 (7th Cir. 1999)(payments to early victims of a pyramid scheme kept
the scheme alive and enabled the defendant to ensnare subsequent victims); United States v. Parker, 364 F.3d 934, 947-th
50 (8 Cir. 2004)(payment for surplus instrumental as part of an ongoing fraud); United States v. Miles, 360 F.3d 472, th
478 (5 Cir. 2004)(adding the observation that when an enterprise is as a whole illegitimate even otherwise ordinary
and lawful expenditures may support a promotion money laundering charge).
104 United States v. King, 169 F.3d 1035, 1040 (6th Cir. 1999)(drug dealers payment for past shipments preserved the
defendant’s opportunity to acquire additional shipments); United States v. Williamson, 339 F.3d 1295, 1302 (11th Cir.
2003).
105 Concealment occurs when anyone:
1. knowing
A. that the property involved in a financial transaction
B. represents the proceeds of some form of unlawful activity,
2. A. conducts or
B. attempts to conduct such a financial transaction
3. which in fact involves the proceeds of specified unlawful activity (A)(i)
4. knowing that the transaction is designed in whole or in part to conceal or disguise the nature, location, the
source, the ownership, or the control of the proceed of specified unlawful activity. 18 U.S.C. 1956(a)(1)(B)
(continued...)





of something more than simply spending the proceed of a predicate offense.106 That having been
said, the line between innocent spending and criminal laundering is not always easily discerned.
“Evidence that may be considered when determining whether a transaction was designed to
conceal includes: [deceptive] statements by a defendant probative of intent to conceal; unusual
secrecy surrounding the transactions; structuring the transaction to avoid attention; depositing
illegal profits in the bank account of a legitimate business; highly irregular features of the
transaction; using third parties to conceal the real owner; a series of unusual financial moves 107
cumulating in the transaction; and expert testimony on practices of criminals.”
The tax evasion108 and structured transactions (“smurfing”) offenses109 shadow the promotion and
concealment offenses. A tax evasion, laundering prosecution requires the government to show
that the defendant acted intentionally rather than inadvertently, but not that the defendant knew 110
that his conduct violated the tax laws. Similarly, conviction for the smurfing offense does not
require a showing that the defendant knew that his conduct was criminal as long as the
government establishes that the defendant acted with the intent to frustrate a reporting 111
requirement. The international laundering crime replicates the elements of the promotion,

(...continued)
(i) (common elements in italics); United States v. Frank, 354 F.3d 910, 919 (8th Cir. 2004)(The money-laundering
statute required the government to prove that each of the defendants conducted or attempted to conduct a financial
transaction, knowing that the property involved in the transaction represented the proceeds of unlawful activity, and
knowing the transaction was designed to conceal or disguise the nature, location, source, ownership, or control of the
proceeds of the unlawful activity”).
106 United States v. Shepard, 396 F.3d 1116, 1120 (10th Cir. 2005); United States v. Stephenson, 183 F.3d 110, 121 (2d
Cir. 1999).
107 United States v. Magluta, 418 F.3d 1166, 1176 (11th Cir. 2005); United States v. Burns, 162 F.3d 840, 848-49 (5th
Cir. 1998), quoting, United States v. Garcia-Emanuel, 14 F.3d 1469, 1475-476 (10th Cir. 1994); see also, United States th
v. Shepard, 396 F.3d 1116, 1122 (10 Cir. 2005)(“Using third parties to conceal the real owner supports the inference th
of an intent to disguise or conceal illegal funds); United Stats v. Bolden, 325 F.3d 471, 490 (4 Cir. 2003)(“The
creation and use of sham businesses is highly relevant to the proof of concealment money laundering).
108 I. knowing
A. that the property involved in a financial transaction
B. represents the proceeds of some form of unlawful activity,
II. A. conducts or
B. attempts to conduct such a financial transaction
III. which in fact involves the proceeds of specified unlawful activity (A)(i)
IV. with the intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code
of 1986, 18 U.S.C. 1956(a)(1)(A)(ii)(elements in common with the promotion offense in italics).
109 I. knowing
A. that the property involved in a financial transaction
B. represents the proceeds of some form of unlawful activity,
II. A. conducts or
B. attempts to conduct such a financial transaction
III. which in fact involves the proceeds of specified unlawful activity (A)(i)
IV. knowing that the transaction is designed in whole or in part to avoid a transaction reporting requirement under
State or Federal law, 18 U.S.C. 1956(a)(1)(B)(ii)(elements shared with the concealment offense in italics).
110 United States v. Zanghi, 189 F.3d 71, 77-8 (1st Cir. 1999).
111 United States v. Hill, 167 F.3d 1055, 1070 (6th Cir. 1999); United States v. Morales, 108 F.3d 1213, 1221 (10th Cir.
(continued...)





concealment and smurfing offenses (but not the tax evasion offense) and adds an international 112
transportation element. Of course, the proof the transportation element alone is insufficient 113
without the evidence of an intent to promote, conceal or smurf.
The final crime found in section 1956 is a “sting” offense, the proscription drafted to permit the
prosecution of money launderers taken in by under cover officers claiming have proceeds in need
of cleansing from illegal gambling or other predicate offenses.
Section 1956 does not make spending tainted money a crime, but section 1957 does. Using most
of the same definitions as section 1956, the elements of 1957 cover anyone who:
I. A. in the United States,
B. in the special maritime or territorial jurisdiction of the United States, or
C. outside the United States if the defendant is an American,
II. knowingly
III. A. engages or
B. attempts to engage in
IV. a monetary transaction114

(...continued)
1997); United States v. Bowman, 235 F.3d 1113, 1117-119 (8th Cir. 2000).
112 The prohibition applies to anyone who:
I. A. transports,
B. transmits, or
C. transfers, or
D. attempts to transport, transmit, or transfer
II. a monetary instrument or funds
III. from a place in the United States to or through a place outside the United States or to a place in the United
States from or through a place outside the United States
A. with the intent to promote the carrying on of specified unlawful activity; or
B. knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer
represent the proceeds of some form of unlawful activity and knowing that such transportation,
transmission, or transfer is designed in whole or in part
i. to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of
specified unlawful activity; or
ii. to avoid a transaction reporting requirement under State or Federal law.
18 U.S.C. 1956(a)(2); United States v. Bieganowski, 313 F.3d 264, 279 (5th Cir. 2002)(An offense under section
1956(a)(2)(B)(i) is almost identical [to an offense under section 1956(a)(1)(B)(i)], with the exception that the
transaction in question must be from a place in the United States to a place outside the United States”); United th
States v. Caplinger, 339 F.3d 226, 232-33 (4 Cir. 2003)(citing authority under the domestic provisions of section
1956(a)(1) in its construction of the international provisions of section 1956(a)(2)).
113 United States v. Pitt, 193 F.3d 751, 762 (3d Cir. 1999).





V. [in or affecting interstate commerce]
VI. in criminally derived property that
A. is of a greater value than $10,000 and
B. is derived from specified unlawful activity. 18 U.S.C. 1957(a),(d),(f).
The government’s jurisdictional burden is the same one it must bear for section 1956 and 115
therefore is minimal. The knowledge requirement receives similar treatment. Thus, the
government must prove that the defendant knew the monetary instrument came from some 116
criminal activity, but not that the defendant knew that the underlying crime was a money 117
laundering predicate.
The proscriptions of the Unlawful Internet Gambling Enforcement Act are simply stated and
parsed:
I. No person
II. engaged in the business of

(...continued)
114 “[T]he termmonetary transaction means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or
foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title)* by, through, or to
a financial institution (as defined in section 1956 of this title),** including any transaction that would be a financial
transaction under section 1956(c)(4)(B) of this title,*** but such term does not include any transaction necessary to
preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution, 18 U.S.C.
1957(f)(1).
* [T]he termmonetary instruments means (i) coin or currency of the United States or of any other country, travelers
checks, personal checks, bank checks, and money orders, or (ii) investment securities or negotiable instruments, in
bearer form or otherwise in such form that title thereto passes upon delivery, 18 U.S.C. 1956(c)(5).
** [T]he termfinancial institution’ has the definition given that term in section 5312(a)(2) of title 31, United States
Code, or the regulations promulgated thereunder,” 18 U.S.C. 1956(c)(6). The title 31 definition quoted, supra, includes
banks, car dealers, jewelers, real estate agents, brick and mortar casinos and most other institutions likely to be
involved in a transaction involve more than $10,000.
*** [T]he term ‘financial transaction’ means . . . (B) a transaction involving the use of a financial institution which is
engaged in, or the activities of which affect, interstate or foreign commerce in any way or degree, 18 U.S.C.
1956(c)(4)(B).
115 United States v. Ables, 167 F.3d 1021, 1030-31 (6th Cir. 1999).
116 United States v. Diamond, 378 F.3d 720, 728 (7th Cir. 2004)(“In order to find Diamond guilty of this offense [under
section 1957], the government needed to prove that she derived property from a specified unlawful activity and that she th
engaged in a monetary transaction); United States v. Johnson, 440 F.3d 1286, 1289(11 Cir. 2006).
117In a prosecution for an offense under this section, the Government is not required to prove the defendant knew that
the offense from which the criminally deprived property was derived was specified unlawful activity, 18 U.S.C. thst
1957(c); United States v. Hawkey, 148 F.3d 920, 925 (8 Cir. 1998); United States v. Carucci, 364 F.3d 339, 343 (1
Cir. 2004); United States v. Flores, 454 F.3d 149, 155 (3d Cir. 2006).





III. betting or wagering
IV. may knowingly accept
V. in connection with participation of another person
VI. in unlawful Internet gambling
VII. a. credit, or the proceeds of credit, extended to or on behalf of such other person
(including credit extended through the use of a credit card; or
b. an electronic fund transfer, or funds transmitted by or through a money transmitting
business, or the proceeds of an electronic fund transfer or money transmitting service,
from or on behalf of such other person; or
c. any check, draft, or similar instrument which is drawn by or on behalf of such other
person and is drawn on or payable at or through any financial institution; or
d. the proceeds of any other form of financial transaction, as the Secretary and the Board
of Governors of the Federal Reserve System may jointly prescribe by regulation, which
involves a financial institution as a payor or financial intermediary on behalf of or for
the benefit of such other person. 31 U.S.C. 5363.
The proscription, however, is attended by an exhaustive array of definitions, qualifications and
exceptions, that color its construction. Not all of these appear in the Act. For instance, the
definitions applicable throughout the Code indicate that the Act’s coverage of “persons” is not
limited to individuals but includes “corporations, companies, associations, firms, partnerships, 118
societies, and joint stock companies, as well as individuals,” 1 U.S.C. 1.
While the Act does not define the “business of betting or wagering,” in sections 5362 and 5367 it
declares that the term “does not include the activities of a financial transaction provider, or any 119
interactive computer service or telecommunications service,” unless they are direct participants 120
in the gambling business. The fact that Congress elected not use the term “illegal gambling 121
business” which appears elsewhere in the Code should probably be understood to mean that the
limitations of that term should not be applied to the term “business of betting or wagering.”

118 Cf., 18 U.S.C. 18 (“As used in this title, the term ‘organization’ means a person other than an individual”).
119 31 U.S.C. 5362.
120 31 U.S.C. 5367 (Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer
service or telecommunications service, may be liable under this subchapter if such person has actual knowledge and
control of bets and wagers, and – (1) operates, manages, supervises, or directs an Internet website at which unlawful
bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be
placed, received, or otherwise made; or (2) owns or controls, or is owned or controlled by, any person who operates,
manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or
otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made”).
121 18 U.S.C. 1955(b)(1)(“(b) As used in this section (1) ‘illegal gambling business’ means a gambling business
which – (i) is a violation of the law of a State or political subdivision in which it is conducted; (ii) involves five or more
persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and (iii) has been or
remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in
any single day).





The Act does define “bet or wager,” yet it also uses that definition to place beyond the reach of
the Act’s proscriptions many forms of activity that otherwise fit the definition but which for the
most part are not ordinarily considered gambling. It describes “bet or wager” as “the staking or
risking by any person of something of value upon the outcome of a contest of others, a sporting
event, or a game subject to chance, upon an agreement or understanding that the person or
another person will receive something of value in the event of a certain outcome,” 31 U.S.C.

5362(1)(A).


Earlier in its legislative history, the definition of “bet or wager” used the phrase “a game
predominantly subject to change” rather than simply “a game subject to change.” The Justice
Department questioned whether the original phrase was “sufficient to cover card games, such as 122
poker.” The change in language appears to accommodate that concern by extending coverage to
games that have an element of chance, even if not necessarily a predominant element.
The definition also explicitly includes lotteries123 and information relating to the financial aspects 124
of gambling. The list of common activities exempted from the definition includes securities and 125126
commodities exchange activities, insurance, Internet games and promotions that do not 127128
involve betting, and certain fantasy sporting activities. The definition of what is not

122 Hearing at 16 (statement of Bruce G. Ohr, Chief of the Organized Crime and Racketeering Section, Criminal
Division, United States Department of Justice).
123 31 U.S.C. 5362(1)(B),(C)(“The term ‘bet or wager’ . . . (B) includes the purchase of a chance or opportunity to win
a lottery or other prize (which opportunity to win is predominantly subject to chance); (C) includes any scheme of a
type described in section 3702 of title 28). 28 U.S.C. 3702 provides, “It shall be unlawful for – (1) a governmental
entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor,
operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other
betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or
otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to
participate, or on one or more performances of such athletes in such games.
124 31 U.S.C. 5362(1)(D)(“The term ‘bet or wager’ . . .(D) includes any instructions or information pertaining to the
establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or
wagering).
125 31 U.S.C. 5362(1)(E)(i)-(iv)(“The term ‘bet or wager’ . . . (E) does not include (i) any activity governed by the
securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 for the purchase or
sale of securities (as that term is defined in section 3(a)(10) of that Act); (ii) any transaction conducted on or subject to
the rules of a registered entity or exempt board of trade under the Commodity Exchange Act; (iii) any over-the-counter
derivative instrument; (iv) any other transaction that (I) is excluded or exempt from regulation under the Commodity
Exchange Act; or (II) is exempt from State gaming or bucket shop laws under section 12(e) of the Commodity
Exchange Act or section 28(a) of the Securities Exchange Act of 1934”).
126 31 U.S.C. 5362(1)(E)(v)-(vii)(“The term ‘bet or wager’ . . . (E) does not include . . .(v) any contract of indemnity or
guarantee; (vi) any contract for insurance; (vii) any deposit or other transaction with an insured depository institution”).
127 31 U.S.C. 5362(1)(E)(viii)(“The term ‘bet or wager’ . . . (E) does not include . . .(viii) participation in any game or
contest in which participants do not stake or risk anything of value other than (I) personal efforts of the participants in
playing the game or contest or obtaining access to the Internet; or (II) points or credits that the sponsor of the game or
contest provides to participants free of charge and that can be used or redeemed only for participation in games or
contests offered by the sponsor).
128 31 U.S.C. 5362(1)(E)(ix)(“The term ‘bet or wager’ . . . (E) does not include . . . (ix) participation in any fantasy or
simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no
fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur
or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following
conditions: (I) All prizes and awards offered to winning participants are established and made known to the participants
in advance of the game or contest and their value is not determined by the number of participants or the amount of any
fees paid by those participants. (II) All winning outcomes reflect the relative knowledge and skill of the participants
and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the
(continued...)





“unlawful Internet gambling” for purposes of the Act provides the exemptions for various forms
of intrastate and tribal gambling legalized under other provisions of law.
“Unlawful Internet gambling” means using the Internet to gamble in a form that is illegal where 129
the bet is placed or received. The Act sets aside the issue of the legality under the Wire Act of 130
various forms of Internet use by the horse racing industry. The Justice Department believes that
the prohibition on the interstate transmission of bets or gambling information found in the Wire
Act (18 U.S.C. 1084) applies to bets on horse racing, but was concerned that language in the Act 131
as introduced might undermine that position. The existing language marks an effort to preserve 132
the status quo.
If certain conditions are met, the definition also exempts from the Act’s prohibitions of the Act
certain intrastate and intratribal forms of gambling, like state lotteries and Indian casinos that
operate under state regulations or compacts, 31 U.S.C. 5362(10)(B), (C). To qualify for the 133
intrastate exception a bet must (1) be made and received in the same state, (2) comply with
applicable state law that authorizes the gambling and the method of transmission including any 134
age and location verification and security requirements, and (3) be in accord with various

(...continued)
case of sports events) in multiple real-world sporting or other events. (III) No winning outcome is based (aa) on the
score, point-spread, or any performance or performances of any single real-world team or any combination of such
teams; or (bb) solely on any single performance of an individual athlete in any single real-world sporting or other
event).
129 31 U.S.C. 5362(10)(A)(“The term ‘unlawful Internet gambling’ means to place, receive, or otherwise knowingly
transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is
unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated,
received, or otherwise made”).
130 31 U.S.C. 5362(10)(D)(“(i) In general.– The term ‘unlawful Internet gambling shall not include any activity that is
allowed under the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.). (ii) Rule of construction regarding
preemption.– Nothing in this subchapter may be construed to preempt any State law prohibiting gambling. (iii) Sense
of Congress.– It is the sense of Congress that this subchapter shall not change which activities related to horse racing
may or may not be allowed under Federal law. This subparagraph is intended to address concerns that this subchapter
could have the effect of changing the existing relationship between the Interstate Horseracing Act and other Federal
statutes in effect on the date of the enactment of this subchapter. This subchapter is not intended to change that
relationship. This subchapter is not intended to resolve any existing disagreements over how to interpret the
relationship between the Interstate Horseracing Act and other Federal statutes).
131 Hearing at 100.
132 Id.(Representative Goodlatte testified that H.R. 4777 is not intended to change the existing relationship between
Section 1084 and the Interstate Horseracing Act. After the April 5, 2006 hearing, the Department worked in
consultation with Representative Goodlatte to develop legislative language for inclusion in H.R. 4777 to effectuate his
intent to maintain the current status quo between the Interstate Horseracing Act and federal criminal statutes”).
133 31 U.S.C. 5362(10)(B)(i)(“The term ‘unlawful Internet gambling’ does not include placing, receiving, or otherwise
transmitting a bet or wager where (i) the bet or wager is initiated and received or otherwise made exclusively within a
single State”). See also, 31 U.S.C. 5362(10)(E)(“The intermediate routing of electronic data shall not determine the
location or locations in which a bet or wager is initiated, received, or otherwise made”).
134 31 U.S.C. 5362(10)(B)(ii)(“The term “unlawful Internet gambling” does not include placing, receiving, or otherwise
transmitting a bet or wager where . . . (ii) the bet or wager and the method by which the bet or wager is initiated and
received or otherwise made is expressly authorized by and placed in accordance with the laws of such State, and the
State law or regulations include – (I) age and location verification requirements reasonably designed to block access to
minors and persons located out of such State; and (II) appropriate data security standards to prevent unauthorized
access by any person whose age and current location has not been verified in accordance with such State’s law or
regulations”).





federal gambling laws.135 The intratribal exception is comparable but a little different.
Compliance with the various federal gambling laws remains a condition, 31 U.S.C. 5362(C)(iv). 136
And there are comparable security as well as age and location verification demands. The
intratribal gambling, however, may involve transmissions between the lands of two or more tribes 137
and need not be within the same state.
Definitions aside, the Act’s prohibitions can only be breached by one who acts “knowingly.” As a
general rule, “the word ‘knowingly’ means that the defendant realized what she was doing and 138
was aware of the nature of her conduct and did not act through ignorance, mistake or accident.”
However, “the term ‘knowingly’ does not necessarily have any reference to a culpable state of 139
mind or to knowledge of the law.”
The Act relies on criminal, civil and regulatory enforcement mechanisms. Violations are
punishable by imprisonment for not more than 5 years and fine of either not more than $250,000

135 31 U.S.C. 5362(10)(B)(iii)(“The term “unlawful Internet gambling” does not include placing, receiving, or
otherwise transmitting a bet or wager where . . . (iii) the bet or wager does not violate any provision of (I) the
Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.); (II) chapter 178 of title 28 (commonly known as the
“Professional and Amateur Sports Protection Act”); (III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et
seq.); or (IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)). The Gambling Devices Transportation Act,
also known as the Johnson Act, among other things prohibits the interstate transportation of gambling devices under
some circumstances. The Indian Gaming Regulatory Act, as the name suggests, regulates gambling on Indian lands.
136 31 U.S.C. 5362((10)(B)(iii)(“The term ‘unlawful Internet gambling does not include placing, receiving, or
otherwise transmitting a bet or wager where . . .(iii) the applicable tribal ordinance or resolution or Tribal-State
compact includes – (I) age and location verification requirements reasonably designed to block access to minors and
persons located out of the applicable Tribal lands; and (II) appropriate data security standards to prevent unauthorized
access by any person whose age and current location has not been verified in accordance with the applicable tribal
ordinance or resolution or Tribal-State Compact).
137 31 U.S.C. 5362(10)(B)(i)(ii)(“The term “unlawful Internet gambling” does not include placing, receiving, or
otherwise transmitting a bet or wager where – (i) the bet or wager is initiated and received or otherwise made
exclusively (I) within the Indian lands of a single Indian tribe (as such terms are defined under the Indian Gaming
Regulatory Act); or (II) between the Indian lands of 2 or more Indian tribes to the extent that intertribal gaming is
authorized by the Indian Gaming Regulatory Act; (ii) the bet or wager and the method by which the bet or wager is
initiated and received or otherwise made is expressly authorized by and complies with the requirements of (I) the
applicable tribal ordinance or resolution approved by the Chairman of the National Indian Gaming Commission; and
(II) with respect to class III gaming, the applicable Tribal-State Compact”). Class I gaming refers to social games
played for stakes of minimal value; class II gaming means bingo and cards games that are legal under applicable state
law (not including blackjack, baccarat and other banking games); class III gaming describes any other form of
gambling that is not class I or class II gaming and includes things like casino gambling, 25 U.S.C. 2703.
138 United States v. Alston-Graves, 435 F.3d 331, 337 (D.C. Cir. 2006)(citing cases from the First, Seventh, and Eighth
Circuits); see also, United States v. Bursey, 416 F.3d 301, 308 n.8 (4th Cir. 2005) (the statutory termknowingly
requires the Government to prove only that the defendant had knowledge of the facts underlying the offense).
139 Bryan v. United States, 524 U.S. 184, 192 (1998); United States v. Technic Services, Inc., 314 F.3d 1031, 1042 (9th
Cir. 2002)(emphasis in the original)(Knowingly . . . refers to the defendant’s knowledge of the acts that constitute th
the offense, not the defendant’s knowledge of the legal violation”); United States v. Blair, 54 F.3d 639, 642 (10 Cir.
1995)(in the context of the Wire Act “knowingly does not mean that the defendant must be shown to have known his
conduct violated the Wire Act); cf., United States v. Cohen, 260 F.3d 68, 71-3 (2d Cir. 2001)(conviction for conspiracy
to engage in conduct in violation the Wire Act does not require proof that the defendant knew that the conduct was th
unlawful); contra, Cohen v. United States, 378 F.2d 751, 756-57 (9 Cir. 1967).





for individuals and not more than $500,000 for organizations or, if the amount is greater, twice
the amount of gain or loss associated with the offense, 31 U.S.C. 5363(a), 18 U.S.C. 3571.
Moreover, the court enjoys the option of permanently banning the individual or entity from the
gambling business, 31 U.S.C. 5363(b).
The same general accomplice and conspirator liability provisions apply to violations of the Act as
to any other federal felony. Those who aid or abet a violation, that is, those who knowing
embrace the criminal activity and assist in its commission with an eye to its success are liable to 140
the same extent as those who commit the offense directly. Conspirators are not only liable for 141
the conspiracy but for any substantive offense foreseeably committed in furtherance of the 142
scheme. Section 5362(2) excludes the activities of financial institutions, communications and
Internet service providers from the definition of “business of betting or wagering.” Section 5367
declares that such entities may nonetheless incur liability under the Act if they are directly 143
engaged in the operation of an Internet gambling site. Neither section precludes their incurring
liability as accomplices or co-conspirators.
The criminal proscriptions of the Unlawful Internet Gambling Enforcement Act do not appear to
qualify as either RICO or money laundering predicate offenses. Certainly, P.L. 109-437 which
created the Act did not explicitly amend either section 1956 or 1961. Moreover, although state
gambling felonies and several federal gambling offenses may serve as predicate offenses for 144
either of the other crimes (money laundering and RICO), the Act outlaws certain Internet
gambling related transactions not Internet gambling itself. Nevertheless, the Act was added to the
chapter (but not the subchapter) of title 31 of the United States Code that houses most of the 145
provisions of the Currency and Foreign Transactions Reporting Act. And violations of the
Currency and Foreign Transactions Reporting Act are RICO predicate offenses (but not money 146
laundering predicates). On balance, it seems likely that the courts would cite the rule of lenity

140 18 U.S.C. 2. “To aid and abet another to commit a crime, it is necessary that a defendant in some sort associate
himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his th
action to make it succeed, United States v. Hungerford, 465 F.2d 1113, 1117 (9 Cir. 2006), citing, Nye & Nissen v. th
United States, 336 U.S. 613, 619 (1949); see also, United States v. Ibarra-Zelaya, 465 F.3d 596, 603 (5 Cir. 2006); th
United States v. Isaac-Sigala, 448 F.3d 1206, 1213 (10 Cir. 2006); United States v. Reifler, 446 F.3d 65, 96 (2d Cir.
2006).
141 18 U.S.C. 371.
142 United States v. Matias, 465 F.3d 169, 173 (5th Cir. 2006), citing, Pinkerton v. United States, 328 U.S. 640, 645
(1946), see also, United States v. Woodard, 459 F.3d 1078, 1084 (11th Cir. 2006); United States v. Carter, 449 F.3d th
1287, 1298 (D.C.Cir. 2006); United States v. Ruiz, 446 F.3d 762, 769 (8 Cir. 2006).
143 31 U.S.C. 5367 (Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer
service or telecommunications service, may be liable under this subchapter if such person has actual knowledge and
control of bets and wagers, and – (1) operates, manages, supervises, or directs an Internet website at which unlawful
bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be
placed, received, or otherwise made; or (2) owns or controls, or is owned or controlled by, any person who operates,
manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or
otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made”).
144 18 U.S.C. 1961(1)(A), (B), 1956(c)(7) (A).
145 Most of the Currency and Foreign Transactions Reporting Act provisions appear in subchapter II of chapter 53 of
the title 31 of the United States Code; the Unlawful Internet Gambling Enforcement Act was added as subchapter IV to
chapter 53.
146 18 U.S.C. 1961(1)(E), 1956(c)(7)(A). Under section 1956(c)(7)(A), all RICO predicates are considered money
laundering predicatesexcept an act which is indictable under subchapter II of chapter 53 of title 31.





as an obstacle to a construction of section 1961(1)(E) that would permit RICO liability predicated 147
solely upon violations of the Unlawful Internet Gambling Enforcement Act.
Section 5365 creates a limited federal civil cause of action to prevent and restrain violations of
the Act. It authorizes federal and state attorneys general to sue in federal court for injunctive relief
to prevent and restrain violations of the Act. It does not foreclose other causes of action on other 148149
provisions of state or federal law, but it does preclude suits in state court to enforce the Act. 150
It does not expressly authorize a private cause of action. It does not expressly offer attorneys
general or anyone else any prospect of relief other than the federal court orders necessary to 151
prevent and restrain. Moreover, it expressly limits the instances when the attorneys general may
institute proceedings against Internet service providers and financial institutions. They may not
proceed civilly against financial institutions to block transactions involving unlawful Internet 152
gambling unless the institution is directly involved in an unlawful Internet gambling business.
Barring application of the same direct involvement exception, the attorneys general may sue
Internet service providers under the Act only to block access to unlawful Internet gambling sites 153
or to hyperlinks to such sites under limited circumstances. Subject to an exception that mirrors

147 Rewis v. United States, 401 U.S. 808, 811-12 (1971)([I]t cannot be said, with certainty sufficient to justify a
criminal conviction, that Congress intended that interstate travel by mere customers of a gambling establishment should
violate the Travel Act. . . . [N]either statutory language nor legislative history supports such a broad-ranging
interpretation of §1952. And even if this lack of support were less apparent, ambiguity concerning the ambit of criminal
statutes should be resolved in favor of lenity); see also, Cleveland v. United States, 531 U.S. 12, 25 (2000).
148 31 U.S.C. 5375(a) (In addition to any other remedy under current law . . .”).
149 Id.(emphasis added) (In addition to any other remedy under current law, the district courts of the United States
shall have original and exclusive jurisdiction to prevent and restrain restricted transactions by issuing appropriate orders
in accordance with this section, regardless of whether a prosecution has been initiated under this subchapter.”)
150 31 U.S.C. 5365((b)(1)(A), (2)(A), (3)(A)(“(1). . .The United States, acting through the Attorney General, may
institute proceedings under this section to prevent or restrain a restricted transaction. . . . (2) . . .The attorney general (or
other appropriate State official) of a State in which a restricted transaction allegedly has been or will be initiated,
received, or otherwise made may institute proceedings under this section to prevent or restrain the violation or
threatened violation . . . (3). . . Notwithstanding paragraphs (1) and (2), for a restricted transaction that allegedly has
been or will be initiated, received, or otherwise made on Indian lands (as that term is defined in section 4 of the Indian
Gaming Regulatory Act) – (i) the United States shall have the enforcement authority provided under paragraph (1); and
(ii) the enforcement authorities specified in an applicable Tribal-State Compact negotiated under section 11 of the
Indian Gaming Regulatory Act (25 U.S.C. 2710) shall be carried out in accordance with that compact”).
151 31 U.S.C. 5365(b)(1)(B), (2)(B)((1) . . .Upon application of the United States under this paragraph, the district
court may enter a temporary restraining order, a preliminary injunction, or an injunction against any person to prevent
or restrain a restricted transaction, in accordance with rule 65 of the Federal Rules of Civil Procedure. (2) . . . Upon
application of the attorney general (or other appropriate State official) of an affected State under this paragraph, the
district court may enter a temporary restraining order, a preliminary injunction, or an injunction against any person to
prevent or restrain a restricted transaction, in accordance with rule 65 of the Federal Rules of Civil Procedure”).
152 31 U.S.C. 5365(d)(Notwithstanding any other provision of this section, and subject to section 5367, no provision of
this subchapter shall be construed as authorizing the Attorney General of the United States, or the attorney general (or
other appropriate State official) of any State to institute proceedings to prevent or restrain a restricted transaction
against any financial transaction provider, to the extent that the person is acting as a financial transaction provider”).
For the text of 31 U.S.C. 5367 see supra note 143. A financial transaction provider is anyone who isa creditor, credit
card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money
transmitting business, or international, national, regional, or local payment network utilized to effect a credit
transaction, electronic fund transfer, stored value product transaction, or money transmitting service, or a participant in
such network, or other participant in a designated payment system, 31 U.S.C. 5362(4).
153 31 U.S.C. 5365(c)(1)(“ Relief granted under this section against an interactive computer service shall – (A) be
(continued...)





the direct involvement exception, the Act also removes providers from the coverage of the Wire
Act provision under which law enforcement officials may insist that communications providers 154
block the wire communications of Wire Act violators. Neither of the provisions restricting the
civil liability of financial institutions and of Internet service providers explicitly immunizes them
from criminal prosecution for aiding or abetting or for conspiracy.
Although the Act restricts the civil liability of financial institutions, it binds them under a
regulatory enforcement scheme outlined in the Act. The Act calls upon the Secretary of the
Treasury and the Governors of the Federal Reserve Board in conjunction with the Attorney
General to create a regulatory mechanism that identifies and blocks financial transactions 155156
prohibited in the Act. Among its other features, the mechanism must admit to practical

(...continued)
limited to the removal of, or disabling of access to, an online site violating section 5363, or a hypertext link to an online
site violating such section, that resides on a computer server that such service controls or operates, except that the
limitation in this subparagraph shall not apply if the service is subject to liability under this section under section 5367;
(B) be available only after notice to the interactive computer service and an opportunity for the service to appear are
provided; (C) not impose any obligation on an interactive computer service to monitor its service or to affirmatively
seek facts indicating activity violating this subchapter; (D) specify the interactive computer service to which it applies;
and (E) specifically identify the location of the online site or hypertext link to be removed or access to which is to be
disabled).
154 31 U.S.C. 5365(c)(2)(“An interactive computer service that does not violate this subchapter shall not be liable under
section 1084(d) of title 18, except that the limitation in this paragraph shall not apply if an interactive computer service
has actual knowledge and control of bets and wagers and – (A) operates, manages, supervises, or directs an Internet
website at which unlawful bets or wagers may be placed, received, or otherwise made or at which unlawful bets or
wagers are offered to be placed, received, or otherwise made; or (B) owns or controls, or is owned or controlled by, any
person who operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be
placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or
otherwise made”). Section 1084(d) provides in relevant part, “(d) When any common carrier, subject to the jurisdiction
of the Federal Communications Commission, is notified in writing by a Federal, State, or local law enforcement
agency, acting within its jurisdiction, that any facility furnished by it is being used or will be used for the purpose of
transmitting or receiving gambling information in interstate or foreign commerce in violation of Federal, State or local
law, it shall discontinue or refuse, the leasing, furnishing, or maintaining of such facility, after reasonable notice to the
subscriber, but no damages, penalty or forfeiture, civil or criminal, shall be found against any common carrier for any
act done in compliance with any notice received from a law enforcement agency.
155 31 U.S.C. 5364 (a)(Before the end of the 270-day period beginning on the date of the enactment of this subchapter,
the Secretary and the Board of Governors of the Federal Reserve System, in consultation with the Attorney General,
shall prescribe regulations (which the Secretary and the Board jointly determine to be appropriate) requiring each
designated payment system, and all participants therein, to identify and block or otherwise prevent or prohibit restricted
transactions through the establishment of policies and procedures reasonably designed to identify and block or
otherwise prevent or prohibit the acceptance of restricted transactions in any of the following ways: (1) The
establishment of policies and procedures that (A) allow the payment system and any person involved in the payment
system to identify restricted transactions by means of codes in authorization messages or by other means; and (B) block
restricted transactions identified as a result of the policies and procedures developed pursuant to subparagraph (A). (2)
The establishment of policies and procedures that prevent or prohibit the acceptance of the products or services of the
payment system in connection with a restricted transaction).
156 31 U.S.C. 5364(b)(1), (2) (In prescribing regulations under subsection (a), the Secretary and the Board of
Governors of the Federal Reserve System shall – (1) identify types of policies and procedures, including nonexclusive
examples, which would be deemed, as applicable, to be reasonably designed to identify and block or otherwise prevent
or prohibit the acceptance of the products or services with respect to each type of restricted transaction; (2) to the extent
practical, permit any participant in a payment system to choose among alternative means of identifying and blocking,
or otherwise preventing or prohibiting the acceptance of the products or services of the payment system or participant
in connection with, restricted transactions”).





exemptions and ensure that lawful Internet gambling transactions are not blocked.157 Good faith 158159
compliance insulates regulated entities from both regulatory and civil liability. Enforcement
of compliance with the regulations falls to the Federal Trade Commission and to the “federal
functional regulators” within their areas of jurisdiction, i.e., the Governors of the Federal Reserve,
the Comptroller of the Currency, the Federal Deposit Insurance Commission, the Office of Thrift
Supervision, the National Credit Union Administration, the Securities and Exchange Commission 160
and the Commodities Exchange Commission.
As noted earlier, whether a federal law applies to conduct committed entirely outside the United 161
States is ordinarily a matter of Congressional intent. The most obvious indicia of Congressional
intent is a statement within a particular statute that its provisions are to have extraterritorial
application. The Unlawful Internet Gambling Act contains no such statement. The legislative
history of the Act, however, leaves little doubt that Congress was at least as concerned with
offshore illegal Internet gambling businesses as with those operated entirely within the United 162
States.

157 31 U.S.C. 5364(b)(3), (4)(In prescribing regulations under subsection (a), the Secretary and the Board of
Governors of the Federal Reserve System shall. . . (3) exempt certain restricted transactions or designated payment
systems from any requirement imposed under such regulations, if the Secretary and the Board jointly find that it is not
reasonably practical to identify and block, or otherwise prevent or prohibit the acceptance of, such transactions; and (4)
ensure that transactions in connection with any activity excluded from the definition of unlawful internet gambling in
subparagraph (B), (C), or (D)(i) of section 5362(10) [relating to lawful intrastate, intratribal, and horse race related
gambling] are not blocked or otherwise prevented or prohibited by the prescribed regulations).
158 31 U.S.C. 5364(c)(A financial transaction provider shall be considered to be in compliance with the regulations
prescribed under subsection (a) if – (1) such person relies on and complies with the policies and procedures of a
designated payment system of which it is a member or participant to(A) identify and block restricted transactions; or
(B) otherwise prevent or prohibit the acceptance of the products or services of the payment system, member, or
participant in connection with restricted transactions; and (2) such policies and procedures of the designated payment
system comply with the requirements of regulations prescribed under subsection (a)).
159 31 U.S.C. 5364(d)(“A person that identifies and blocks a transaction, prevents or prohibits the acceptance of its
products or services in connection with a transaction, or otherwise refuses to honor a transaction – (1) that is a
restricted transaction; (2) that such person reasonably believes to be a restricted transaction; or (3) as a designated
payment system or a member of a designated payment system in reliance on the policies and procedures of the payment
system, in an effort to comply with regulations prescribed under subsection (a),shall not be liable to any party for such
action”).
160 31 U.S.C. 5364(e)(The requirements under this section shall be enforced exclusively by – (1) the Federal functional
regulators, with respect to the designated payment systems and financial transaction providers subject to the respective
jurisdiction of such regulators under section 505(a) of the Gramm-Leach-Bliley Act [(15 U.S.C. 6805(a)), see also, 15
U.S.C. 6809(2)] and section 5g of the Commodities Exchange Act [(7 U.S.C. 7b-2)]; and (2) the Federal Trade
Commission, with respect to designated payment systems and financial transaction providers not otherwise subject to
the jurisdiction of any Federal functional regulators (including the Commission) as described in paragraph (1)).
161 See supra text accompanying notes 61-69.
162 See e.g., H.Rept. 109-412 (Pt.1), at 8 (2006)([The Act’s] primary purpose is to give U.S. law enforcement new,
more effective tools for combating offshore Internet gambling sites that illegally extend their services to U.S. residents
via the Internet); H.Rept. 109-412 (Pt.2), at 8 (2006)(The booming industry of offshore websites accepting bets and
wagers from persons located in the United States raises a number of social and criminal concerns related to Internet
gambling”).





There have been suggestions that prosecution of illegal Internet gambling raises various
constitutional issues. Principal among these are questions as to legislative power under the
Commerce Clause, restrictions imposed by the First Amendment’s guarantee of free speech, and
due process concerns about the regulation of activities occurring at least in part overseas.
Congress possesses no legislative power that cannot be traced to the Constitution, U.S.Const.
Amends. IX, X. Among its Constitutionally enumerated powers, Congress enjoys the authority
“To regulate Commerce with foreign Nations, and among the several States, and with the Indian
Tribes . . . [and] To make all Laws which shall be necessary and proper for carrying into
Execution the foregoing Powers . . . .” U.S.Const. Art. I, §8, cls.3, 18. Over the years, the
Supreme Court regularly confirmed the enormous breath of Congress’s legislative prerogatives
under the Commerce Clause. Within the last decade, however, it has announced a series of
decisions pointed out that Congress’s Commerce power is not without limit.
United States v. Lopez, 514 U.S. 549 (1995), and United States v. Morrison, are perhaps the best
known of these. Lopez held that the Congress lacked the authority under the Commerce Clause to
enact the Gun-Free School Zones Act, 18 U.S.C. 922(q)(1988 ed., Supp. II), which outlawed
possession of a firearm within 1000 feet of a school, 514 U.S. at 551. In doing so, Lopez mapped
Congress’ Commerce Clause powers:
First, Congress may regulate the use of the channels of interstate commerce. . . . Heart of
Atlanta Motel, [Inc. v. United States, 379 U.S. 241, 256 (1964)](“‘[T]he authority of Congress
to keep the channels of interstate commerce free from immoral and injurious uses has been
frequently sustained and is no longer open to question’”).
Second, Congress is empowered to regulate and protect the instrumentalities of interstate
commerce, or persons or things in interstate commerce, even through the threat may come
only from intrastate activities. See. e.g., . . . Perez [v. United States, 402 U.S. 146, 150
(1971)] (“[F]or example, the destruction of an aircraft (18 U.S.C. §32), or . . . thefts from
interstate shipments (18 U.S.C. §659”).
Finally, Congress’ commerce authority includes the power to regulate those activities having
a substantial relation to interstate commerce, i.e., those activities that substantially affect
interstate commerce. 514 U.S. at 558-59 (several citations of the Court omitted).
Since the School Zone Act addressed neither the channels nor the content of commerce, it had to
find coverage under the power to regulate matters that “substantially affect” interstate or foreign
commerce. This it could not do. It was devoid of any economic component and so could claim no
kinship to earlier cases approving Congressional regulation of various forms of intrastate
economic activity that substantially affected interstate commerce, such as, “regulation of
intrastate coal mining, intrastate extortionate credit transactions [loan sharking], restaurants
utilizing substantial interstate supplies, inns and hotels catering to interstate guests, and
production and consumption of homegrown wheat,” 514 U.S. at 559-60.





Moreover, the Act lacked the kind of explicit restraints or guidelines that might have confined its
application to instances more clearly within the Commerce power. Its criminal proscription
contained no “commerce” element; it did not, for example, outlaw possession of a firearm, which
had been transported in interstate commerce, within 1000 feet of a school. Its enactment occurred
without the accompaniment of legislative findings or declarations of purpose that might have
guided appropriate enforcement limitations. The Act’s overreaching was all the more troubling
because it sought to bring federal regulation to school activities, an area where the states 163
“historically have been sovereign.”
Morrison echoed Lopez, quoting it extensively in the course of an opinion that found that the
Commerce Clause did not empower Congress to create a federal civil remedy for the victims of
gender-motivated violence, 529 U.S. at 607-19. Other opinions confirm that the Commerce
Clause must be read in light of the principles of federalism reflected in the Tenth Amendment. For
instance, the Clause does not empower Congress to compel the states to exercise their sovereign 164
legislative or executive powers to implement a federal regulatory scheme.
These limitations, notwithstanding, the federal appellate courts have concluded, thus far, that the
federal gambling statutes, directed as they are against an economic activity, come safely within 165
Congress’ legislative authority under the Commerce Clause.
Gambling implicates First Amendment free speech concerns on two levels. Gambling is
communicative by nature. Gambling also relies on advertising and a wide range of auxiliary
communication services. Historically, gambling itself has been considered a vice and
consequently beyond the protection of the First Amendment. There is every reason to believe that
illegal gambling remains beyond the shield of the First Amendment. Gone, however, is the notion
that the power to outlaw a vice includes the power to outlaw auxiliary speech when the 166
underlying vice remains unregulated. The Supreme Court made this readily apparent when it

163 514 U.S. at 64; 514 U.S. at 83 (Kennedy & OConnor, JJ., concurring)(The statute now before us forecloses the
States from experimenting and exercising their own judgment in an area to which States lay claim by right of history
and expertise, and it does so by regulating an activity beyond the realm of commerce in the ordinary and usual sense of
that term).
164 New York v. United States, 505 U.S. 144, 188 (1992)(“The Federal Government may not compel the States to enact
or administer a federal regulatory program); Printz v. United States, 521 U.S. 898, 935 (1997)(The Federal
Government may neither issue directives requiring the states to address particular problems, nor command the States’
officers, or those of their political subdivisions, to administer or enforce a federal regulatory program). This does not
mean that the states are beyond federal regulation when they engage in interstate, or interstate-impacting, commercial
activity, Reno v. Condon, 528 U.S. 141, 148-51 (2000).
165 United States v. Lee, 173 F.3d 809, 810-11 (11th Cir. 1999)(18 U.S.C. 1955) (limiting proscriptions to gambling
businesses provides the nexus to interstate commerce impact); United States v. Zizzo, 120 F.3d 1338, 1350 (7th Cir. th
1997) (same); United States v. Wall, 92 F.3d 1444, 1449 (6 Cir. 1996) (same); United States v. Riddle, 249 F.3d 529, th
537 (6 Cir. 2001)(18 U.S.C. 1955, 1962)(conduct of a commercial activity, a gambling business, precludes a th
successful Lopez challenge); United States v. Boyd, 149 F.3d 1062, 1065-66 (10 Cir. 1998)(18 U.S.C. 1955) (the
statute regulates a commercial activity (gambling), comes with Congressional findings concerning the activitys impact
on interstate commerce, and contains elements that weed out run of the mill, low level gambling cases – all factors
absent in Lopez).
166 Greater New Orleans Broadcasting Assn, Inc. v. United States, 527 U. S. at 182 noting that 44 Liquormart, Inc. v.
Rhode Island, 517 U.S. 484 (1996), “rejected the argument that the power to restrict speech about certain socially
harmful activities was as broad as the power to prohibit such conduct.”





approved an advertising ban on gambling illegal at the point of broadcast,167 but invalidated an 168
advertising ban on gambling lawful at the point of broadcast.
Although the Court’s decisions acknowledges the ambivalence of American gambling policies,169
they do not appear to threaten the basic premise that the First Amendment permits Congress to
outlaw gambling in any form and to ban any speech incidental to illegal gambling.
Commentators have suggested two possible due process issues triggered by application of federal
criminal law to off shore Internet gambling. They point to the due process limitations on the
exercise of personal jurisdiction over the defendant or subject matter jurisdiction over the 170
gambling activity.
Questions of personal jurisdiction are the more familiar of the two. They revolve around issues,
often addressed in civil cases, concerning the reach of a state’s long arm statute. The Supreme
Court has explained that:
The Due Process Clause protects an individuals liberty interest in not being subject to
the binding judgments of a forum with which he has established no meaningful ‘contacts,
ties, or relations.’ International Shoe Co. v. Washington, 326 U.S. [310], at 319. By requiring
that individuals have fair warning that a particular activity may subject them to the
jurisdiction of a foreign sovereign, the Due Process Clause gives a degree of predictability to
the legal system that allows potential defendants to structure their primary conduct with
some minimum assurance as to where that conduct will and will not render them liable to
suit, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) . . . .
[T]he constitutional touchstone remains whether the defendant purposefully established
minimum contacts in the forum State. Although it has been argued that foreseeability of
causing injury in another State should be sufficient to establish such contacts there when
policy considerations so require, the Court has consistently held that this kind of
foreseeability is not a sufficient benchmark for exercising personal jurisdiction. Instead, the
foreseeability that is critical to due process analysis . . . is that the defendant’s conduct and

167 United States v. Edge Broadcasting Co. 509 U.S. 418 (1993).
168 Greater New Orleans Broadcasting Assn, Inc. v. United States, 527 U.S. 173 (1999). Greater New Orleans adopted
the Central Hudson test, quoted above in part, “At the outset, we must determine whether the expression is protected by
the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and
not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield
positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and
whether it is not more extensive than is necessary to serve that interest,” Greater New Orleans Broadcasting Assn, Inc.
v. United States, 527 U.S. at 183.
169The operation of [18 U.S.C.] 1304 and its attendant regulatory regime is so pierced by exemptions and
inconsistencies that the Government cannot hope to exonerate it,” 527 U.S. at 190.
170 Schwartz, The Internet Gambling Fallacy Craps Out, 14 BERKELEY TECHNOLOGY LAW JOURNAL 1021, 1039-46
(1999); Do Not Bet on Unilateral Prohibition of Internet Gambling to Eliminate Cyber-Casinos, 1999 UNIVERSITY OF
ILLINOIS LAW REVIEW 1045, 1062-65; Keller, The Games the Same: Why Gambling in Cyberspace Violates Federal
Law, 108 YALE LAW JOURNAL 1569, 1596-1602 (1999); World Wide Wager: The Feasibility of Internet Gambling
Regulation, 8 SETON HALL CONSTITUTIONAL LAW JOURNAL 815, 827-48 (1998).





connection with the forum State are such that he should reasonably anticipate being haled
into court there. Burger King Corp. v. Rudzewicz, 472 U.S. 462, 471-74 (1985)(some internal
quotation marks and citations omitted).
The federal appellate courts, called upon to apply these principles in Internet commercial
litigation, have concluded that suing nonresident parties doing business on the Internet where
their customers are found does not offend due process requirements. Yet, more than a passive
Internet site is required; the critical test is the level of commercial activity associated with the 171
website.
Subject matter, although raised less often, is closely related. It involves the question of when, in
fairness, nonresidents can be bound by local law for conduct they committed elsewhere. Due
process aside, the overseas application of federal criminal law applies overseas is a matter of 172
Congressional choice rather than constitutional requirement. Sometimes Congress has said
when a statute is to apply abroad, the money launder statutes for example, 18 U.S.C. 1956(f), 173
1957(d). Where Congress enacts a statute in the exercise of authority to regulate foreign
commerce, it may be applied to those aspects of the foreign commerce of the United States that 174
occur overseas, for example, gambling involving this country and any other. Even where a
statute itself is silent as to overseas application, under some circumstances the courts will assume 175
Congress intended the law to have extraterritorial application.
The authority of Congress to establish extraterritorial jurisdiction is limited by due process,176 but
only a few lower court cases have attempted to explain the boundaries. Those cases suggest that

171 Gator.Com Corp. v. L.L.Bean, Inc., 341 F.3d 1072, 1081 (9th Cir. 2003); Carefirst of Maryland, Inc. v. Carefirst
Pregnancy Centers, Inc., 334 F.3d 390, 398-99 (4th Cir. 2003); Soma Medical International v. Standard Chartered thth
Bank, 196 F.3d 1292, 1296 (10 Cir. 1999); Mink v. AAAA Development LLC, 190 F.3d 333, 336-37 (5 Cir. 1999);
Alitalia-Linee Aeree Italiane v. Casinoalitalia.Com., 128 F.Supp.2d 340, 349-50 (E.D.Va. 2001); see also, State v.
Granite Gate Resorts, Inc., 568 N.W.2d 715, 718 (Minn.App. 1997), aff’d, 576 N.W.2d 747 (Minn. 1998); see
generally, General Jurisdiction and Internet Contacts: What Role, If Any, Should the Zippo Sliding Scale Test Play in
the Analysis? 74 FORDHAM LAW REVIEW 2371 (2006).
172 United States v. Yousef, 327 F.3d 56, 86 (2d Cir. 2003); United States v. Neil, 312 F.3d 419, 421 (9th Cir. 2002); cf.,
EEOC v. Arabian American Oil Co., 499 U.S. 244, 248 (1991); but see, United States v. Columba-Colella, 604 F.2d th
3546, 360 (5 Cir. 1979).
173 “There is extraterritorial jurisdiction over the conduct prohibited by this section if(1) the conduct is by a United
States citizen or, in the case of a non-United States citizen, the conduct occurs in part in the United States; and (2) the
transaction or series of related transactions involves funds or monetary instruments of a value exceeding $10,000,” 18
U.S.C. 1956(f); section 1957 establishes extraterritorial jurisdiction whenthe offense under this section takes place
outside the United States and such special jurisdiction, but the defendant is a United States person (as defined in section
3077 of this title, but excluding the class described in paragraph (2)(D) of such section).”
174 United States v. Ross, 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999)(refusal to dismiss an indictment charging
violations of 18 U.S.C. 1084 arising out of operation of an Internet gambling operation centered in Curacao but
accepting wagers from the United States).
175 United States v. Bowman, 260 U.S. 74 (1922); United States v. Ford, 273 U.S. 593 (1927). To do so, the courts must
overcome the natural assumption that a nation’s laws apply within and only within its boundaries and that the laws of
no other nation apply there. To determine if Congress enacted a particular statute with a contrary intent, the courts will
look to the purpose for the statute, the language used in it, and whether international law provides a principle that will
support extraterritorial application. For a more extensive discussion see CRS Report 94-166, Extraterritorial
Application of American Criminal Law.
176 United States v. Yousef, 327 F.3d 56, 111 (2d Cir. 2003); United States v. Medjuck, 48 F.3d 1107, 1110-111 (9th Cir.
1995); United States v. Martinez-Hidalgo, 993 F.2d 1052, 1056 (3d Cir. 1993); United States v. Robinson, 843 F.2d 1,
(continued...)





due process insists that the offshore application of federal criminal law be limited to those
instances where there is some nexus to the United States, some factor to alert an individual 177
overseas of the need to avoid the conduct condemned in our law.

(...continued)
6-7 (1st Cir. 1998); United States v. Columba-Corella, 604 F.2d 356, 358-61 (5th Cir. 1979).
177 United States v. Davis, 905 F.2d 245, 249 n.2 (9th Cir. 1990) (International law principles may be useful as a rough
guide of whether a sufficient nexus exists between the defendant and the United States so that application of the statute
in question would not violate due process”). Whether notice is sufficient and how much process is due will depend
upon the circumstances of a given case, United States v. Martinez-Hidalgo, 993 F.2d 1052, 1056-57 (3d Cir. 1993)
(noting that the prosecution of universally condemned conduct does not offend due process even in absence of a nexus th
to the United States); United States v. Juda, 46 F.3d 961, 966-67 (9 Cir. 1995)(due process does not require proof of a
nexus to the United States for misconduct committed aboard astateless vessel since by failing to claim registry under
the laws of a specific country the vessel is known under international law to have subjected itself to the laws of every th
nation); United States v. Suerte, 291 F.3d 366, 370-71 (5 Cir. 2002)(due process does not require a nexus between a
foreign citizen and the United States when the misconduct has occurred aboard a vessel whose nation of registry as
consented to the application of U.S. law).






ALA.CODE §§13A-12-20 to 13A-12-92; MONT.CODE ANN. §§23-5-110 to 23-5-810;
ALASKA STAT. §§11.66.200 to 11.66.280; NEB.REV.STAT. §§28-1101 to 28-1117;
ARIZ. REV.STAT.ANN. §§13-3301 to 13-3312; NEV.REV.STAT. §§462.250 to 462.330;
ARK.CODE ANN. §§5-66-101 to 5-66-119; N.H.REV.STAT.ANN. §§647:1 to 647:2;
CAL.PENAL CODE §§319 to 337z; N.J.STAT.ANN. §§2C:37-1 to 2C:37-9;
COLO.REV.STAT.ANN. §§18-10-101 to 18-10-108; N.M.STAT.ANN. §§30-19-1 to 30-19-7.2;
CONN.GEN.STAT.ANN. §§53-278a to 53-278g; N.Y.PENAL LAW §§225.00 to 225.40;
DEL.CODE ANN. tit.11 §§1410 to 1432; N.C.GEN.STAT. §§14-289 to 14-309.20;
FLA.STAT.ANN. §§849.01 to 849.46; N.D.CENT.CODE §§12.1-28-01 to 12.1-28-02;
GA.CODE ANN. §§16-12-20 to 16-12-62; OHIO REV.CODE ANN. §§2915.01 to 2915.13;
HAW.REV.STAT. §§712-1220 to 712-1231; OKLA.STAT.ANN. tit.21 §§941 to 996.3;
IDAHO CODE §§18-3801 to 18-3810; ORE.REV.STAT. §§167.108 to 167.167;
ILL.COMP.LAWS ANN. ch.720 §§5/28-1 to 5/28-9; PA.STAT.ANN. tit.18 §§5512 to 5514;
IND.CODE ANN. §§35-45-5-1 to 35-45-5-10; R.I.GEN.LAWS §§11-19-1 to 11-19-45; 11-51-1 to 11-51-2;
IOWA CODE ANN. §§727.5 to 725.16; S.C.CODE ANN. §§16-19-10 to 16-19-160;
KAN.STAT.ANN. §21-4302 to 21-4308; S.D.COD.LAWS ANN. §§22-25-1 to 22-25-51; 22-25A-1 to
KY.REV.STAT.ANN. §§528.010 to 528.120; 22-25A-15;
LA.REV.STAT.ANN. §§14:90 to 14:90.4; TENN.CODE ANN. §§39-17-501 to 39-17-610;
ME.REV.STAT.ANN. tit.17-A §§951 to 961; TEX.PENAL CODE ANN. arts. 47.01 to 47.10;
MD.CRIM.CODE ANN. §§12-101 to 12-307; UTAH CODE ANN. §§76-10-1101 to 76-10-1109;
MASS.GEN.LAWS ANN. ch.271 §§1 to 50; VT.STAT.ANN. tit.13 §§2101 to 2177;
MICH.COMP.LAWS ANN. §§750.301 to 750.315a, 759.330 VA.CODE ANN. §§18.2-325 to 18.2-340.38;
to 750.331, 750.372 to 750.376a; WASH.REV.CODE ANN. §§9.46.10 to 9.46.903;
MINN.STAT.ANN. §§609.75 to 609.763. W.VA.CODE §§61-10-1 to 61-10-31;
MISS.CODE ANN§97-33-1 to 97-33-49; WIS.STAT.ANN. §§945.01 to 945.13;
MO.ANN.STAT. §§572.010 to 572.125; WYO.STAT. §§6-7-101 to 6-7-104.






8 U.S.C. 1101(a)(43)(D),(J)(definition of aggravated felony (grounds for deportation of an alien)


includes violations of 18 U.S.C. 1956 & 1957 (money laundering) and 18 U.S.C. 1084(interstate
transmission of gambling information), 1955 (gambling business), 1962 (RICO))
8 U.S.C. 1101(f)(4),(5)(no one whose income is derived from gambling and no one with 2 or
more gambling convictions can be consider of good moral character)(grounds to deny entry into
the U.S.)
8 U.S.C. 1182(a)(2)(D)(iii)(excludable aliens include those coming to the U.S. to engage in
commercialized vice)(grounds for denying entry and for deportation of aliens who were
excludable at the time of entry)

12 U.S.C. 25a (national banks may not participate in lotteries or related activities)


12 U.S.C. 339 (state member banks (members of Federal Reserve) may not participate in lotteries
or related activities)

12 U.S.C. 1463 (federal savings associations may not participate in lotteries or related activities)


12 U.S.C. 1829a (state nonmember but federally insured banks may not participate in lotteries or
related activities)

15 U.S.C. 1171 to 1178 (unlawful interstate or international transportation of gambling devices)


15 U.S.C. 3001 to 3007 (Interstate Horseracing Act)


18 U.S.C. 224 (bribery with intent to influence the outcome of a sporting event)


18 U.S.C. 1081 to 1083 (gambling ships)


18 U.S.C. 1084 (interstate or international transmission of wagering information)


18 U.S.C. 1301 (interstate or international transportation of lottery tickets)


18 U.S.C. 1302 (mailing lottery tickets or related matter)


18 U.S.C. 1303 (postal officials acting as lottery agents)


18 U.S.C. 1304 (broadcasting lottery information)


18 U.S.C. 1305 (fishing contests exempted)


18 U.S.C. 1306 (penalties for violating 12 U.S.C. 25a, 339, and 1829a)


18 U.S.C. 1307 (exemptions for state-run lotteries)


18 U.S.C. 1511 (obstructing state or local law enforcement officials to facilitate an illegal
gambling business)





18 U.S.C. 1952 (interstate or foreign travel or use of the mails to facilitate illegal activities
defined to include business enterprises involving gambling)

18 U.S.C. 1953 (interstate or foreign transportation of wagering paraphernalia)


18 U.S.C. 1955 (engaging in an illegal gambling business)


18 U.S.C. 1956 (money laundering of funds associated with any of a list of predicate offenses
which includes), by way of 18 U.S.C. 1961, 18 U.S.C. 1955)
18 U.S.C. 1957 (engaging in financial transactions involving funds derived from any of the
crimes in the money laundering predicate list, e.g., 18 U.S.C. 1955)
18 U.S.C. 1959 (violent crimes in aid of racketeering defined to include 18 U.S.C. 1955, again by
way of 18 U.S.C. 1961)
18 U.S.C. 1961-1965 (racketeer influenced and corrupt organizations (RICO) prohibits patterned
use of predicate crimes to acquire or operate an enterprise affecting interstate or foreign
commerce; predicate crime list includes 18 U.S.C. 1955)
19 U.S.C. 1305 (prohibits the importation of lottery tickets or advertisements for lotteries, inter
alia)

25 U.S.C. 2701 to 2721 (regulation of Indian gaming)


26 U.S.C. 4401 to 4405 (federal taxes on wagers)


26 U.S.C. 4411 to 4424 (gambling occupation tax)


26 U.S.C. 5723 (tobacco products manufactured in or imported into the U.S. may not include
lottery tickets)

28 U.S.C. 3701 to 3704 (protection of professional and amateur sports from gambling)


31 U.S.C. 5361 to 5367 (Unlawful Internet Gambling Enforcement Act)


39 U.S.C. 3005 (restrictions on mailing lottery-related)







Transmission of wagering information; penalties
(a) Whoever being engaged in the business of betting or wagering knowingly uses a wire
communication facility for the transmission in interstate or foreign commerce of bets or wagers or
information assisting in the placing of bets or wagers on any sporting event or contest, or for the
transmission of a wire communication which entitles the recipient to receive money or credit as a
result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be
fined under this title or imprisoned not more than two years, or both.
(b) Nothing in this section shall be construed to prevent the transmission in interstate or foreign
commerce of information for use in news reporting of sporting events or contests, or for the
transmission of information assisting in the placing of bets or wagers on a sporting event or
contest from a State or foreign country where betting on that sporting event or contest is legal into
a State or foreign country in which such betting is legal.
(c) Nothing contained in this section shall create immunity from criminal prosecution under any
laws of any State.
(d) When any common carrier, subject to the jurisdiction of the Federal Communications
Commission, is notified in writing by a Federal, State, or local law enforcement agency, acting
within its jurisdiction, that any facility furnished by it is being used or will be used for the
purpose of transmitting or receiving gambling information in interstate or foreign commerce in
violation of Federal, State or local law, it shall discontinue or refuse, the leasing, furnishing, or
maintaining of such facility, after reasonable notice to the subscriber, but no damages, penalty or
forfeiture, civil or criminal, shall be found against any common carrier for any act done in
compliance with any notice received from a law enforcement agency. Nothing in this section shall
be deemed to prejudice the right of any person affected thereby to secure an appropriate
determination, as otherwise provided by law, in a Federal court or in a State or local tribunal or
agency, that such facility should not be discontinued or removed, or should be restored.
(e) As used in this section, the term “State” means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or a commonwealth, territory or possession of the
United States.
Prohibition of illegal gambling businesses
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal
gambling business shall be fined under this title or imprisoned not more than five years, or both.
(b) As used in this section–





(1) “illegal gambling business” means a gambling business which–
(i) is a violation of the law of a State or political subdivision in which it is conducted;
(ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or
part of such business; and
(iii) has been or remains in substantially continuous operation for a period in excess of thirty days
or has a gross revenue of $2,000 in any single day.
(2) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot
machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers
games, or selling chances therein.
(3) “State” means any State of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, and any territory or possession of the United States.
(c) If five or more persons conduct, finance, manage, supervise, direct, or own all or part of a
gambling business and such business operates for two or more successive days, then, for the
purpose of obtaining warrants for arrests, interceptions, and other searches and seizures, probable
cause that the business receives gross revenue in excess of $2,000 in any single day shall be
deemed to have been established.
(d) Any property, including money, used in violation of the provisions of this section may be
seized and forfeited to the United States. All provisions of law relating to the seizure, summary,
and judicial forfeiture procedures, and condemnation of vessels, vehicles, merchandise, and
baggage for violation of the customs laws; the disposition of such vessels, vehicles, merchandise,
and baggage or the proceeds from such sale; the remission or mitigation of such forfeitures; and
the compromise of claims and the award of compensation to informers in respect of such
forfeitures shall apply to seizures and forfeitures incurred or alleged to have been incurred under
the provisions of this section, insofar as applicable and not inconsistent with such provisions.
Such duties as are imposed upon the collector of customs or any other person in respect to the
seizure and forfeiture of vessels, vehicles, merchandise, and baggage under the customs laws
shall be performed with respect to seizures and forfeitures of property used or intended for use in
violation of this section by such officers, agents, or other persons as may be designated for that
purpose by the Attorney General.
(e) This section shall not apply to any bingo game, lottery, or similar game of chance conducted
by an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the
Internal Revenue Code of 1954, as amended, if no part of the gross receipts derived from such
activity inures to the benefit of any private shareholder, member, or employee of such
organization except as compensation for actual expenses incurred by him in the conduct of such
activity.
Interstate and foreign travel or transportation in aid of racketeering enterprises
(a) Whoever travels in interstate or foreign commerce or uses the mail or any facility in interstate
or foreign commerce, with intent to–





(1) distribute the proceeds of any unlawful activity; or
(2) commit any crime of violence to further any unlawful activity; or
(3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management,
establishment, or carrying on, of any unlawful activity,
and thereafter performs or attempts to perform–
(A) an act described in paragraph (1) or (3) shall be fined under this title, imprisoned not more
than 5 years, or both; or
(B) an act described in paragraph (2) shall be fined under this title, imprisoned for not more than

20 years, or both, and if death results shall be imprisoned for any term of years or for life.


(b) As used in this section (i) “unlawful activity” means (1) any business enterprise involving
gambling, liquor on which the Federal excise tax has not been paid, narcotics or controlled
substances (as defined in section 102(6) of the Controlled Substances Act), or prostitution
offenses in violation of the laws of the State in which they are committed or of the United States,
(2) extortion, bribery, or arson in violation of the laws of the State in which committed or of the
United States, or (3) any act which is indictable under subchapter II of chapter 53 of title 31,
United States Code, or under section 1956 or 1957 of this title and (ii) the term “State” includes a
State of the United States, the District of Columbia, and any commonwealth, territory, or
possession of the United States.
(c) Investigations of violations under this section involving liquor shall be conducted under the
supervision of the Attorney General.
Prohibited activities
(a) It shall be unlawful for any person who has received any income derived, directly or
indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in
which such person has participated as a principal within the meaning of section 2, title 18, United
States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of
such income, in acquisition of any interest in, or the establishment or operation of, any enterprise
which is engaged in, or the activities of which affect, interstate or foreign commerce. A purchase
of securities on the open market for purposes of investment, and without the intention of
controlling or participating in the control of the issuer, or of assisting another to do so, shall not
be unlawful under this subsection if the securities of the issuer held by the purchaser, the
members of his immediate family, and his or their accomplices in any pattern or racketeering
activity or the collection of an unlawful debt after such purchase do not amount in the aggregate
to one percent of the outstanding securities of any one class, and do not confer, either in law or in
fact, the power to elect one or more directors of the issuer.
(b) It shall be unlawful for any person through a pattern of racketeering activity or through
collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or
control of any enterprise which is engaged in, or the activities of which affect, interstate or
foreign commerce.





(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in,
or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly
or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity
or collection of unlawful debt.
(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection
(a), (b), or (c) of this section.
Definitions
As used in this chapter–
(1) “racketeering activity” means (A) any act or threat involving murder, kidnapping, gambling,
arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance
or listed chemical (as defined in section 102 of the Controlled Substances Act), which is
chargeable under State law and punishable by imprisonment for more than one year; (B) any act
which is indictable under any of the following provisions of title 18, United States Code: Section
201 (relating to bribery), section 224 (relating to sports bribery), sections 471, 472, and 473
(relating to counterfeiting), section 659 (relating to theft from interstate shipment) if the act
indictable under section 659 is felonious, section 664 (relating to embezzlement from pension and
welfare funds), sections 891-894 (relating to extortionate credit transactions), section 1028
(relating to fraud and related activity in connection with identification documents), section 1029
(relating to fraud and related activity in connection with access devices), section 1084 (relating to
the transmission of gambling information), section 1341 (relating to mail fraud), section 1343
(relating to wire fraud), section 1344 (relating to financial institution fraud), section 1425
(relating to the procurement of citizenship or nationalization unlawfully), section 1426 (relating
to the reproduction of naturalization or citizenship papers), section 1427 (relating to the sale of
naturalization or citizenship papers), sections 1461-1465 (relating to obscene matter), section
1503 (relating to obstruction of justice), section 1510 (relating to obstruction of criminal
investigations), section 1511 (relating to the obstruction of State or local law enforcement),
section 1512 (relating to tampering with a witness, victim, or an informant), section 1513
(relating to retaliating against a witness, victim, or an informant), section 1542 (relating to false
statement in application and use of passport), section 1543 (relating to forgery or false use of
passport), section 1544 (relating to misuse of passport), section 1546 (relating to fraud and misuse
of visas, permits, and other documents), sections 1581-1592 (relating to peonage, slavery, and
trafficking in persons), section 1951 (relating to interference with commerce, robbery, or
extortion), section 1952 (relating to racketeering), section 1953 (relating to interstate
transportation of wagering paraphernalia), section 1954 (relating to unlawful welfare fund
payments), section 1955 (relating to the prohibition of illegal gambling businesses), section 1956
(relating to the laundering of monetary instruments), section 1957 (relating to engaging in
monetary transactions in property derived from specified unlawful activity), section 1958
(relating to use of interstate commerce facilities in the commission of murder-for-hire), section
1960 (relating to illegal money transmitters), sections 2251, 2251A, 2252, and 2260 (relating to
sexual exploitation of children), sections 2312 and 2313 (relating to interstate transportation of
stolen motor vehicles), sections 2314 and 2315 (relating to interstate transportation of stolen
property), section 2318 (relating to trafficking in counterfeit labels for phonorecords, computer
programs or computer program documentation or packaging and copies of motion pictures or
other audiovisual works), section 2319 (relating to criminal infringement of a copyright), section





2319A (relating to unauthorized fixation of and trafficking in sound recordings and music videos
of live musical performances), section 2320 (relating to trafficking in goods or services bearing
counterfeit marks), section 2321 (relating to trafficking in certain motor vehicles or motor vehicle
parts), sections 2341-2346 (relating to trafficking in contraband cigarettes), sections 2421-24
(relating to white slave traffic), sections 175-178 (relating to biological weapons), sections 229-
229F (relating to chemical weapons), section 831 (relating to nuclear materials); (C) any act
which is indictable under title 29, United States Code, section 186 (dealing with restrictions on
payments and loans to labor organizations) or section 501(c) (relating to embezzlement from
union funds), (D) any offense involving fraud connected with a case under title 11 (except a case
under section 157 of this title), fraud in the sale of securities, or the felonious manufacture,
importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled
substance or listed chemical (as defined in section 102 of the Controlled Substances Act),
punishable under any law of the United States, (E) any act which is indictable under the Currency
and Foreign Transactions Reporting Act, (F) any act which is indictable under the Immigration
and Nationality Act, section 274 (relating to bringing in and harboring certain aliens), section 277
(relating to aiding or assisting certain aliens to enter the United States), or section 278 (relating to
importation of alien for immoral purpose) if the act indictable under such section of such Act was
committed for the purpose of financial gain, or (G) any act that is indictable under any provision
listed in section 2332b(g)(5)(B);
(2) “State” means any State of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, any territory or possession of the United States, any political subdivision, or any
department, agency, or instrumentality thereof;
(3) “person” includes any individual or entity capable of holding a legal or beneficial interest in
property;
(4) “enterprise” includes any individual, partnership, corporation, association, or other legal
entity, and any union or group of individuals associated in fact although not a legal entity;
(5) “pattern of racketeering activity” requires at least two acts of racketeering activity, one of
which occurred after the effective date of this chapter and the last of which occurred within ten
years (excluding any period of imprisonment) after the commission of a prior act of racketeering
activity;
(6) “unlawful debt” means a debt (A) incurred or contracted in gambling activity which was in
violation of the law of the United States, a State or political subdivision thereof, or which is
unenforceable under State or Federal law in whole or in part as to principal or interest because of
the laws relating to usury, and (B) which was incurred in connection with the business of
gambling in violation of the law of the United States, a State or political subdivision thereof, or
the business of lending money or a thing of value at a rate usurious under State or Federal law,
where the usurious rate is at least twice the enforceable rate;
(7) “racketeering investigator” means any attorney or investigator so designated by the Attorney
General and charged with the duty of enforcing or carrying into effect this chapter;
(8) “racketeering investigation” means any inquiry conducted by any racketeering investigator for
the purpose of ascertaining whether any person has been involved in any violation of this chapter
or of any final order, judgment, or decree of any court of the United States, duly entered in any
case or proceeding arising under this chapter;





(9) “documentary material” includes any book, paper, document, record, recording, or other
material; and
(10) “Attorney General” includes the Attorney General of the United States, the Deputy Attorney
General of the United States, the Associate Attorney General of the United States, any Assistant
Attorney General of the United States, or any employee of the Department of Justice or any
employee of any department or agency of the United States so designated by the Attorney
General to carry out the powers conferred on the Attorney General by this chapter. Any
department or agency so designated may use in investigations authorized by this chapter either
the investigative provisions of this chapter or the investigative power of such department or
agency otherwise conferred by law.
Laundering of monetary instruments
(a)(1) Whoever, knowing that the property involved in a financial transaction represents the
proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial
transaction which in fact involves the proceeds of specified unlawful activity–
(A) (i) with the intent to promote the carrying on of specified unlawful activity; or
(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206
of the Internal Revenue Code of 1986; or
(B) knowing that the transaction is designed in whole or in part–
(i) to conceal or disguise the nature, the location, the source, the ownership, or the
control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved
in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.
For purposes of this paragraph, a financial transaction shall be considered to be one involving the
proceeds of specified unlawful activity if it is part of a set of parallel or dependent transactions,
any one of which involves the proceeds of specified unlawful activity, and all of which are part of
a single plan or arrangement.
(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a
monetary instrument or funds from a place in the United States to or through a place outside the
United States or to a place in the United States from or through a place outside the United States–
(A) with the intent to promote the carrying on of specified unlawful activity; or
(B) knowing that the monetary instrument or funds involved in the transportation,
transmission, or transfer represent the proceeds of some form of unlawful activity and
knowing that such transportation, transmission, or transfer is designed in whole or in
part–





(i) to conceal or disguise the nature, the location, the source, the ownership, or the
control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or Federal law,
shall be sentenced to a fine of not more than $500,000 or twice the value of the monetary
instrument or funds involved in the transportation, transmission, or transfer whichever is greater,
or imprisonment for not more than twenty years, or both. For the purpose of the offense described
in subparagraph (B), the defendant’s knowledge may be established by proof that a law
enforcement officer represented the matter specified in subparagraph (B) as true, and the
defendant’s subsequent statements or actions indicate that the defendant believed such
representations to be true.
(3) Whoever, with the intent–
(A) to promote the carrying on of specified unlawful activity;
(B) to conceal or disguise the nature, location, source, ownership, or control of property
believed to be the proceeds of specified unlawful activity; or
(C) to avoid a transaction reporting requirement under State or Federal law,
conducts or attempts to conduct a financial transaction involving property represented to be the
proceeds of specified unlawful activity, or property used to conduct or facilitate specified
unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both.
For purposes of this paragraph and paragraph (2), the term “represented” means any
representation made by a law enforcement officer or by another person at the direction of, or with
the approval of, a Federal official authorized to investigate or prosecute violations of this section.
(b) Penalties.–
(1) In general.– Whoever conducts or attempts to conduct a transaction described in
subsection (a)(1) or (a)(3), or section 1957, or a transportation, transmission, or
transfer described in subsection (a)(2), is liable to the United States for a civil penalty
of not more than the greater of—
(A) the value of the property, funds, or monetary instruments involved in the transaction;
or
(B) $10,000.
(2) Jurisdiction over foreign persons.—For purposes of adjudicating an action filed or enforcing a
penalty ordered under this section, the district courts shall have jurisdiction over any foreign
person, including any financial institution authorized under the laws of a foreign country, against
whom the action is brought, if service of process upon the foreign person is made under the
Federal Rules of Civil Procedure or the laws of the country in which the foreign person is found,
and–
(A) the foreign person commits an offense under subsection (a) involving a financial
transaction that occurs in whole or in part in the United States;





(B) the foreign person converts, to his or her own use, property in which the United
States has an ownership interest by virtue of the entry of an order of forfeiture by a
court of the United States; or
(C) the foreign person is a financial institution that maintains a bank account at a
financial institution in the United States.
(3) Court authority over assets.– A court may issue a pretrial restraining order or take any other
action necessary to ensure that any bank account or other property held by the defendant in the
United States is available to satisfy a judgment under this section.
(4) Federal receiver.–
(A) In general.– A court may appoint a Federal Receiver, in accordance with
subparagraph(B) of this paragraph, to collect, marshal, and take custody, control, and
possession of all assets of the defendant, wherever located, to satisfy a civil judgment
under this subsection, a forfeiture judgment under section 981 or 982, or a criminal
sentence under section 1957 or subsection (a) of this section, including an order of
restitution to any victim of a specified unlawful activity.
(B) Appointment and authority.– A Federal Receiver described in subparagraph (A)–
(i) may be appointed upon application of a Federal prosecutor or a Federal or State
regulator, by the court having jurisdiction over the defendant in the case;
(ii) shall be an officer of the court, and the powers of the Federal Receiver shall
include the powers set out in section 754 of title 28, United States Code; and
(iii) shall have standing equivalent to that of a Federal prosecutor for the purpose of
submitting requests to obtain information regarding the assets of the defendant–
(I) from the Financial Crimes Enforcement Network of the Department of the
Treasury; or
(II) from a foreign country pursuant to a mutual legal assistance treaty,
multilateral agreement, or other arrangement for international law
enforcement assistance, provided that such requests are in accordance with
the policies and procedures of the Attorney General.
(c) As used in this section–
(1) the term “knowing that the property involved in a financial transaction represents the
proceeds of some form of unlawful activity” means that the person knew the property
involved in the transaction represented proceeds from some form, though not
necessarily which form, of activity that constitutes a felony under State, Federal, or
foreign law, regardless of whether or not such activity is specified in paragraph (7);
(2) the term “conducts” includes initiating, concluding, or participating in initiating, or
concluding a transaction;





(3) the term “transaction” includes a purchase, sale, loan, pledge, gift, transfer, delivery, or other
disposition, and with respect to a financial institution includes a deposit, withdrawal, transfer
between accounts, exchange of currency, loan, extension of credit, purchase or sale of any stock,
bond, certificate of deposit, or other monetary instrument, use of a safe deposit box, or any other
payment, transfer, or delivery by, through, or to a financial institution, by whatever means
effected;
(4) the term “financial transaction” means (A) a transaction which in any way or degree affects
interstate or foreign commerce (i) involving the movement of funds by wire or other means or (ii)
involving one or more monetary instruments, or (iii) involving the transfer of title to any real
property, vehicle, vessel, or aircraft, or (B) a transaction involving the use of a financial
institution which is engaged in, or the activities of which affect, interstate or foreign commerce in
any way or degree;
(5) the term “monetary instruments” means (i) coin or currency of the United States or of any
other country, travelers’ checks, personal checks, bank checks, and money orders, or (ii)
investment securities or negotiable instruments, in bearer form or otherwise in such form that title
thereto passes upon delivery;
(6) the term “financial institution” includes–
(A) any financial institution, as defined in section 5312(a)(2) of title 31, United States
Code, or the regulations promulgated thereunder; and
(B) any foreign bank, as defined in section 1 of the International Banking Act of 1978 (12
U.S.C. 3101);
(7) the term “specified unlawful activity” means–
(A) any act or activity constituting an offense listed in section 1961(1) of this title except
an act which is indictable under subchapter II of chapter 53 of title 31;
(B) with respect to a financial transaction occurring in whole or in part in the United
States, an offense against a foreign nation involving–
(i) the manufacture, importation, sale, or distribution of a controlled substance (as
such term is defined for the purposes of the Controlled Substances Act);
(ii) murder, kidnapping, robbery, extortion, destruction of property by means of
explosive or fire, or a crime of violence (as defined in section 16);
(iii) fraud, or any scheme or attempt to defraud, by or against a foreign bank (as
defined in paragraph 7 of section 1(b) of the International Banking Act of 1978));
(iv) bribery of a public official, or the misappropriation, theft, or embezzlement of
public funds by or for the benefit of a public official;
(v) smuggling or export control violations involving–
(I) an item controlled on the United States Munitions List established under
section 38 of the Arms Export Control Act (22 U.S.C. 2778); or





(II) an item controlled under regulations under the Export Administration
Regulations (15 C.F.R. Parts 730-774);
(vi) an offense with respect to which the United States would be obligated by a
multilateral treaty, either to extradite the alleged offender or to submit the case
for prosecution, if the offender were found within the territory of the United
States; or
(vii) trafficking in persons, selling or buying of children, sexual exploitation of
children, or transporting, recruiting or harboring a person, including a child, for
commercial sex acts;
(C) any act or acts constituting a continuing criminal enterprise, as that term is defined in
section 408 of the Controlled Substances Act (21 U.S.C. 848);
(D) an offense under section 32 (relating to the destruction of aircraft), section 37
(relating to violence at international airports), section 115 (relating to influencing,
impeding, or retaliating against a Federal official by threatening or injuring a family
member), section 152 (relating to concealment of assets; false oaths and claims;
bribery), section 175c (relating to the variola virus), section 215 (relating to
commissions or gifts for procuring loans), section 351 (relating to congressional or
Cabinet officer assassination), any of sections 500 through 503 (relating to certain
counterfeiting offenses), section 513 (relating to securities of States and private
entities), section 541 (relating to goods falsely classified), section 542 (relating to
entry of goods by means of false statements), section 545 (relating to smuggling
goods into the United States), section 549 (relating to removing goods from Customs
custody), section 554 (relating to smuggling goods from the United States), section

641 (relating to public money, property, or records), section 656 (relating to theft,


embezzlement, or misapplication by bank officer or employee), section 657 (relating
to lending, credit, and insurance institutions), section 658 (relating to property
mortgaged or pledged to farm credit agencies), section 666 (relating to theft or
bribery concerning programs receiving Federal funds), section 793, 794, or 798
(relating to espionage), section 831 (relating to prohibited transactions involving
nuclear materials), section 844(f) or (i) (relating to destruction by explosives or fire
of Government property or property affecting interstate or foreign commerce),
section 875 (relating to interstate communications), section 922(1) (relating to the
unlawful importation of firearms), section 924(n) (relating to firearms trafficking),
section 956 (relating to conspiracy to kill, kidnap, maim, or injure certain property in
a foreign country), section 1005 (relating to fraudulent bank entries), 1006 (relating
to fraudulent Federal credit institution entries), 1007 (relating to fraudulent Federal
Deposit Insurance transactions), 1014 (relating to fraudulent loan or credit
applications), section 1030 (relating to computer fraud and abuse), 1032 (relating to
concealment of assets from conservator, receiver, or liquidating agent of financial
institution), section 1111 (relating to murder), section 1114 (relating to murder of
United States law enforcement officials), section 1116 (relating to murder of foreign
officials, official guests, or internationally protected persons), section 1201 (relating
to kidnaping), section 1203 (relating to hostage taking), section 1361 (relating to
willful injury of Government property), section 1363 (relating to destruction of
property within the special maritime and territorial jurisdiction), section 1708 (theft
from the mail), section 1751 (relating to Presidential assassination), section 2113 or





2114 (relating to bank and postal robbery and theft), section 2280 (relating to
violence against maritime navigation), section 2281 (relating to violence against
maritime fixed platforms), section 2319 (relating to copyright infringement), section
2320 (relating to trafficking in counterfeit goods and services), section 2332 (relating
to terrorist acts abroad against United States nationals), section 2332a (relating to use
of weapons of mass destruction), section 2332b (relating to international terrorist acts
transcending national boundaries), section 2332g (relating to missile systems
designed to destroy aircraft), section 2332h (relating to radiological dispersal
devices), or section 2339A or 2339B (relating to providing material support to
terrorists), section 2339C (relating to financing of terrorism), or 2339D (relating to
receiving military-type training from a foreign terrorist organization) of this title,
section 46502 of title 49, United States Code, a felony violation of the Chemical
Diversion and Trafficking Act of 1988 (relating to precursor and essential chemicals),
section 590 of the Tariff Act of 1930 (19 U.S.C. 1590) (relating to aviation
smuggling), section 422 of the Controlled Substances Act (relating to transportation
of drug paraphernalia), section 38(c) (relating to criminal violations) of the Arms
Export Control Act, section 11 (relating to violations) of the Export Administration
Act of 1979, section 206 (relating to penalties) of the International Emergency
Economic Powers Act, section 16 (relating to offenses and punishment) of the
Trading with the Enemy Act, any felony violation of section 15 of the Food Stamp
Act of 1977 [7 U.S.C.A. 2024] (relating to food stamp fraud) involving a quantity of
coupons having a value of not less than $5,000, any violation of section 543(a)(1) of
the Housing Act of 1949 [42 U.S.C. 1490s(a)(1)] (relating to equity skimming), any
felony violation of the Foreign Agents Registration Act of 1938, or section 92 of the
Atomic Energy Act of 1954 (42 U.S.C. 2122)(relating to prohibitions governing
atomic weapons), any felony violation of the Foreign Corrupt Practices Act;
(E) a felony violation of the Federal Water Pollution Control Act (33 U.S.C. 1251 et
seq.), the Ocean Dumping Act (33 U.S.C. 1401 et seq.), the Act to Prevent Pollution
from Ships (33 U.S.C. 1901 et seq.), the Safe Drinking Water Act (42 U.S.C. 300f et
seq.), or the Resources Conservation and Recovery Act (42 U.S.C. 6901 et seq.); or
(F) any act or activity constituting an offense involving a Federal health care offense;
(8) the term “State” includes a State of the United States, the District of Columbia, and any
commonwealth, territory, or possession of the United States.
(d) Nothing in this section shall supersede any provision of Federal, State, or other law imposing
criminal penalties or affording civil remedies in addition to those provided for in this section.
(e) Violations of this section may be investigated by such components of the Department of
Justice as the Attorney General may direct, and by such components of the Department of the
Treasury as the Secretary of the Treasury may direct, as appropriate and, with respect to offenses
over which the Department of Homeland Security has jurisdiction, by such components of the
Department of Homeland Security as the Secretary of Homeland Security may direct, and with
respect to offenses over which the United States Postal Service has jurisdiction, by the Postal
Service. Such authority of the Secretary of the Treasury, the Secretary of Homeland Security, and
the Postal Service shall be exercised in accordance with an agreement which shall be entered into
by the Secretary of the Treasury, the Secretary of Homeland Security, the Postal Service, and the
Attorney General. Violations of this section involving offenses described in paragraph (c)(7)(E)





may be investigated by such components of the Department of Justice as the Attorney General
may direct, and the National Enforcement Investigations Center of the Environmental Protection
Agency.
(f) There is extraterritorial jurisdiction over the conduct prohibited by this section if–
(1) the conduct is by a United States citizen or, in the case of a non-United States citizen,
the conduct occurs in part in the United States; and
(2) the transaction or series of related transactions involves funds or monetary
instruments of a value exceeding $10,000.
(g) Notice of conviction of financial institutions.– If any financial institution or any officer,
director, or employee of any financial institution has been found guilty of an offense under this
section, section 1957 or 1960 of this title, or section 5322 or 5324 of title 31, the Attorney
General shall provide written notice of such fact to the appropriate regulatory agency for the
financial institution.
(h) Any person who conspires to commit any offense defined in this section or section 1957 shall
be subject to the same penalties as those prescribed for the offense the commission of which was
the object of the conspiracy.
(i) Venue.– (1) Except as provided in paragraph (2), a prosecution for an offense under this
section or section 1957 may be brought in–
(A) any district in which the financial or monetary transaction is conducted; or
(B) any district where a prosecution for the underlying specified unlawful activity could
be brought, if the defendant participated in the transfer of the proceeds of the
specified unlawful activity from that district to the district where the financial or
monetary transaction is conducted.
(2) A prosecution for an attempt or conspiracy offense under this section or section 1957 may be
brought in the district where venue would lie for the completed offense under paragraph (1), or in
any other district where an act in furtherance of the attempt or conspiracy took place.
(3) For purposes of this section, a transfer of funds from 1 place to another, by wire or any other
means, shall constitute a single, continuing transaction. Any person who conducts (as that term is
defined in subsection (c)(2)) any portion of the transaction may be charged in any district in
which the transaction takes place.
Engaging in monetary transactions in property derived from specified unlawful activity
(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or
attempts to engage in a monetary transaction in criminally derived property that is of a value
greater than $10,000 and is derived from specified unlawful activity, shall be punished as
provided in subsection (b).





(b)(1) Except as provided in paragraph (2), the punishment for an offense under this section is a
fine under title 18, United States Code, or imprisonment for not more than ten years or both.
(2) The court may impose an alternate fine to that imposable under paragraph (1) of not more
than twice the amount of the criminally derived property involved in the transaction.
(c) In a prosecution for an offense under this section, the Government is not required to prove the
defendant knew that the offense from which the criminally derived property was derived was
specified unlawful activity.
(d) The circumstances referred to in subsection (a) are –
(1) that the offense under this section takes place in the United States or in the special
maritime and territorial jurisdiction of the United States; or
(2) that the offense under this section takes place outside the United States and such
special jurisdiction, but the defendant is a United States person (as defined in section
3077 of this title, but excluding the class described in paragraph (2)(D) of such
section).
(e) Violations of this section may be investigated by such components of the Department of
Justice as the Attorney General may direct, and by such components of the Department of the
Treasury as the Secretary of the Treasury may direct, as appropriate and, with respect to offenses
over which the Department of Homeland Security has jurisdiction, by such components of the
Department of Homeland Security as the Secretary of Homeland Security may direct, and with
respect to offenses over which the United States Postal Service has jurisdiction, by the Postal
Service. Such authority of the Secretary of the Treasury, the Secretary of Homeland Security, and
the Postal Service shall be exercised in accordance with an agreement which shall be entered into
by the Secretary of the Treasury, the Secretary of Homeland Security, the Postal Service, and the
Attorney General.
(f) As used in this section–
(1) the term “monetary transaction” means the deposit, withdrawal, transfer, or exchange, in or
affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section
1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this
title), including any transaction that would be a financial transaction under section 1956(c)(4)(B)
of this title, but such term does not include any transaction necessary to preserve a person’s right
to representation as guaranteed by the sixth amendment to the Constitution;
(2) the term “criminally derived property” means any property constituting, or derived from,
proceeds obtained from a criminal offense; and
(3) the term “specified unlawful activity” has the meaning given that term in section 1956 of this
title.
31 U.S.C. 5363. Prohibition on acceptance of any financial instrument for unlawful internet
gambling





No person engaged in the business of betting or wagering may knowingly accept, in connection
with the participation of another person in unlawful Internet gambling –
(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including
credit extended through the use of a credit card);
(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business,
or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of
such other person;
(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person
and is drawn on or payable at or through any financial institution; or
(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of
Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a
financial institution as a payor or financial intermediary on behalf of or for the benefit of such
other person.
31 U.S.C. 5366. Criminal penalties
(a) In general. – Any person who violates section 5363 shall be fined under title 18, imprisoned
for not more than 5 years, or both.
(b) Permanent injunction. – Upon conviction of a person under this section, the court may enter a
permanent injunction enjoining such person from placing, receiving, or otherwise making bets or
wagers or sending, receiving, or inviting information assisting in the placing of bets or wagers.
31 U.S.C. 5367. Circumventions prohibited
Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer
service or telecommunications service, may be liable under this subchapter if such person has
actual knowledge and control of bets and wagers, and –
(1) operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers
may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be
placed, received, or otherwise made; or
(2) owns or controls, or is owned or controlled by, any person who operates, manages, supervises,
or directs an Internet website at which unlawful bets or wagers may be placed, received, or
otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or
otherwise made.
31 U.S.C. 5365. Civil remedies
(a) Jurisdiction.– In addition to any other remedy under current law, the district courts of the
United States shall have original and exclusive jurisdiction to prevent and restrain restricted
transactions by issuing appropriate orders in accordance with this section, regardless of whether a
prosecution has been initiated under this subchapter.
(b) Proceedings.–





(1) Institution by Federal government.–
(A) In general.– The United States, acting through the Attorney General, may institute
proceedings under this section to prevent or restrain a restricted transaction.
(B) Relief.– Upon application of the United States under this paragraph, the district court may
enter a temporary restraining order, a preliminary injunction, or an injunction against any person
to prevent or restrain a restricted transaction, in accordance with rule 65 of the Federal Rules of
Civil Procedure.
(2) Institution by State attorney general.–
(A) In general.– The attorney general (or other appropriate State official) of a State in which a
restricted transaction allegedly has been or will be initiated, received, or otherwise made may
institute proceedings under this section to prevent or restrain the violation or threatened violation.
(B) Relief.– Upon application of the attorney general (or other appropriate State official) of an
affected State under this paragraph, the district court may enter a temporary restraining order, a
preliminary injunction, or an injunction against any person to prevent or restrain a restricted
transaction, in accordance with rule 65 of the Federal Rules of Civil Procedure.
(3) Indian lands.–
(A) In general.– Notwithstanding paragraphs (1) and (2), for a restricted transaction that allegedly
has been or will be initiated, received, or otherwise made on Indian lands (as that term is defined
in section 4 of the Indian Gaming Regulatory Act)–
(i) the United States shall have the enforcement authority provided under paragraph (1);
and
(ii) the enforcement authorities specified in an applicable Tribal-State Compact
negotiated under section 11 of the Indian Gaming Regulatory Act (25 U.S.C. 2710)
shall be carried out in accordance with that compact.
(B) Rule of construction.– No provision of this section shall be construed as altering, superseding,
or otherwise affecting the application of the Indian Gaming Regulatory Act.
(c) Limitation relating to interactive computer services.–
(1) In general.– Relief granted under this section against an interactive computer service shall–
(A) be limited to the removal of, or disabling of access to, an online site violating section 5363, or
a hypertext link to an online site violating such section, that resides on a computer server that
such service controls or operates, except that the limitation in this subparagraph shall not apply if
the service is subject to liability under this section under section 5367;
(B) be available only after notice to the interactive computer service and an opportunity for the
service to appear are provided;
(C) not impose any obligation on an interactive computer service to monitor its service or to
affirmatively seek facts indicating activity violating this subchapter;





(D) specify the interactive computer service to which it applies; and
(E) specifically identify the location of the online site or hypertext link to be removed or access to
which is to be disabled.
(2) Coordination with other law.– An interactive computer service that does not violate this
subchapter shall not be liable under section 1084(d) of title 18, except that the limitation in this
paragraph shall not apply if an interactive computer service has actual knowledge and control of
bets and wagers and –
(A) operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers
may be placed, received, or otherwise made or at which unlawful bets or wagers are offered to be
placed, received, or otherwise made; or
(B) owns or controls, or is owned or controlled by, any person who operates, manages,
supervises, or directs an Internet website at which unlawful bets or wagers may be placed,
received, or otherwise made, or at which unlawful bets or wagers are offered to be placed,
received, or otherwise made.
(d) Limitation on injunctions against regulated persons.– Notwithstanding any other provision of
this section, and subject to section 5367, no provision of this subchapter shall be construed as
authorizing the Attorney General of the United States, or the attorney general (or other
appropriate State official) of any State to institute proceedings to prevent or restrain a restricted
transaction against any financial transaction provider, to the extent that the person is acting as a
financial transaction provider.
31 U.S.C. 5364. Policies and procedures to identify and prevent restricted transactions
(a) Regulations.– Before the end of the 270-day period beginning on the date of the enactment of
this subchapter, the Secretary and the Board of Governors of the Federal Reserve System, in
consultation with the Attorney General, shall prescribe regulations (which the Secretary and the
Board jointly determine to be appropriate) requiring each designated payment system, and all
participants therein, to identify and block or otherwise prevent or prohibit restricted transactions
through the establishment of policies and procedures reasonably designed to identify and block or
otherwise prevent or prohibit the acceptance of restricted transactions in any of the following
ways:
(1) The establishment of policies and procedures that–
(A) allow the payment system and any person involved in the payment system to identify
restricted transactions by means of codes in authorization messages or by other means; and
(B) block restricted transactions identified as a result of the policies and procedures developed
pursuant to subparagraph (A).
(2) The establishment of policies and procedures that prevent or prohibit the acceptance of the
products or services of the payment system in connection with a restricted transaction.
(b) Requirements for policies and procedures.– In prescribing regulations under subsection (a),
the Secretary and the Board of Governors of the Federal Reserve System shall–





(1) identify types of policies and procedures, including nonexclusive examples, which would be
deemed, as applicable, to be reasonably designed to identify and block or otherwise prevent or
prohibit the acceptance of the products or services with respect to each type of restricted
transaction;
(2) to the extent practical, permit any participant in a payment system to choose among
alternative means of identifying and blocking, or otherwise preventing or prohibiting the
acceptance of the products or services of the payment system or participant in connection with,
restricted transactions;
(3) exempt certain restricted transactions or designated payment systems from any requirement
imposed under such regulations, if the Secretary and the Board jointly find that it is not
reasonably practical to identify and block, or otherwise prevent or prohibit the acceptance of,
such transactions; and
(4) ensure that transactions in connection with any activity excluded from the definition of
unlawful internet gambling in subparagraph (B), (C), or (D)(i) of section 5362(10) are not
blocked or otherwise prevented or prohibited by the prescribed regulations.
(c) Compliance with payment system policies and procedures.– A financial transaction provider
shall be considered to be in compliance with the regulations prescribed under subsection (a) if –
(1) such person relies on and complies with the policies and procedures of a designated payment
system of which it is a member or participant to–
(A) identify and block restricted transactions; or
(B) otherwise prevent or prohibit the acceptance of the products or services of the
payment system, member, or participant in connection with restricted transactions;
and
(2) such policies and procedures of the designated payment system comply with the requirements
of regulations prescribed under subsection (a).
(d) No liability for blocking or refusing to honor restricted transactions.– A person that identifies
and blocks a transaction, prevents or prohibits the acceptance of its products or services in
connection with a transaction, or otherwise refuses to honor a transaction –
(1) that is a restricted transaction;
(2) that such person reasonably believes to be a restricted transaction; or
(3) as a designated payment system or a member of a designated payment system in reliance on
the policies and procedures of the payment system, in an effort to comply with regulations
prescribed under subsection (a),shall not be liable to any party for such action.
(e) Regulatory enforcement.– The requirements under this section shall be enforced exclusively
by–
(1) the Federal functional regulators, with respect to the designated payment systems and
financial transaction providers subject to the respective jurisdiction of such regulators under





section 505(a) of the Gramm-Leach-Bliley Act and section 5g of the Commodities Exchange Act;
and
(2) the Federal Trade Commission, with respect to designated payment systems and financial
transaction providers not otherwise subject to the jurisdiction of any Federal functional regulators
(including the Commission) as described in paragraph (1).
31 U.S.C. 5362. Definitions
In this subchapter:
(1) Bet or wager.– The term “bet or wager”–
(A) means the staking or risking by any person of something of value upon the outcome of a
contest of others, a sporting event, or a game subject to chance, upon an agreement or
understanding that the person or another person will receive something of value in the event of a
certain outcome;
(B) includes the purchase of a chance or opportunity to win a lottery or other prize (which
opportunity to win is predominantly subject to chance);
(C) includes any scheme of a type described in section 3702 of title 28;
(D) includes any instructions or information pertaining to the establishment or movement of
funds by the bettor or customer in, to, or from an account with the business of betting or
wagering; and
(E) does not include –
(i) any activity governed by the securities laws (as that term is defined in section 3(a)(47)
of the Securities Exchange Act of 1934 for the purchase or sale of securities (as that
term is defined in section 3(a)(10) of that Act);
(ii) any transaction conducted on or subject to the rules of a registered entity or exempt
board of trade under the Commodity Exchange Act;
(iii) any over-the-counter derivative instrument;
(iv) any other transaction that –
(I) is excluded or exempt from regulation under the Commodity Exchange Act; or
(II) is exempt from State gaming or bucket shop laws under section 12(e) of the
Commodity Exchange Act or section 28(a) of the Securities Exchange Act of

1934;


(v) any contract of indemnity or guarantee;
(vi) any contract for insurance;
(vii) any deposit or other transaction with an insured depository institution;





(viii) participation in any game or contest in which participants do not stake or risk
anything of value other than –
(I) personal efforts of the participants in playing the game or contest or obtaining
access to the Internet; or
(II) points or credits that the sponsor of the game or contest provides to participants
free of charge and that can be used or redeemed only for participation in games
or contests offered by the sponsor; or
(ix) participation in any fantasy or simulation sports game or educational game or contest
in which (if the game or contest involves a team or teams) no fantasy or simulation
sports team is based on the current membership of an actual team that is a member of
an amateur or professional sports organization (as those terms are defined in section

3701 of title 28) and that meets the following conditions:


(I) All prizes and awards offered to winning participants are established and made
known to the participants in advance of the game or contest and their value is not
determined by the number of participants or the amount of any fees paid by those
participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants
and are determined predominantly by accumulated statistical results of the
performance of individuals (athletes in the case of sports events) in multiple real-
world sporting or other events.
(III) No winning outcome is based –
(aa) on the score, point-spread, or any performance or performances of any single
real-world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-
world sporting or other event.
(2) Business of betting or wagering.– The term “business of betting or wagering” does not include
the activities of a financial transaction provider, or any interactive computer service or
telecommunications service.
(3) Designated payment system.– The term “designated payment system” means any system
utilized by a financial transaction provider that the Secretary and the Board of Governors of the
Federal Reserve System, in consultation with the Attorney General, jointly determine, by
regulation or order, could be utilized in connection with, or to facilitate, any restricted transaction.
(4) Financial transaction provider.– The term “financial transaction provider” means a creditor,
credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer
may be initiated, money transmitting business, or international, national, regional, or local
payment network utilized to effect a credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or a participant in such network, or other
participant in a designated payment system.





(5) Internet.– The term “Internet” means the international computer network of interoperable
packet switched data networks.
(6) Interactive computer service.– The term “interactive computer service” has the meaning given
the term in section 230(f) of the Communications Act of 1934 (47 U.S.C. 230(f)).
(7) Restricted transaction.– The term “restricted transaction” means any transaction or transmittal
involving any credit, funds, instrument, or proceeds described in any paragraph of section 5363
which the recipient is prohibited from accepting under section 5363.
(8) Secretary.– The term “Secretary” means the Secretary of the Treasury.
(9) State.– The term “State” means any State of the United States, the District of Columbia, or
any commonwealth, territory, or other possession of the United States.
(10) Unlawful internet gambling. –
(A) In general.– The term “unlawful Internet gambling” means to place, receive, or otherwise
knowingly transmit a bet or wager by any means which involves the use, at least in part, of the
Internet where such bet or wager is unlawful under any applicable Federal or State law in the
State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.
(B) Intrastate transactions.– The term “unlawful Internet gambling” does not include placing,
receiving, or otherwise transmitting a bet or wager where –
(i) the bet or wager is initiated and received or otherwise made exclusively within a
single State;
(ii) the bet or wager and the method by which the bet or wager is initiated and received or
otherwise made is expressly authorized by and placed in accordance with the laws of
such State, and the State law or regulations include –
(I) age and location verification requirements reasonably designed to block access to
minors and persons located out of such State; and
(II) appropriate data security standards to prevent unauthorized access by any person
whose age and current location has not been verified in accordance with such
State’s law or regulations; and
(iii) the bet or wager does not violate any provision of –
(I) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);
(II) chapter 178 of title 28 (commonly known as the “Professional and Amateur
Sports Protection Act”);
(III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or
(IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).





(C) Intratribal transactions.– The term “unlawful Internet gambling” does not include placing,
receiving, or otherwise transmitting a bet or wager where –
(i) the bet or wager is initiated and received or otherwise made exclusively–
(I) within the Indian lands of a single Indian tribe (as such terms are defined under
the Indian Gaming Regulatory Act); or
(II) between the Indian lands of 2 or more Indian tribes to the extent that intertribal
gaming is authorized by the Indian Gaming Regulatory Act;
(ii) the bet or wager and the method by which the bet or wager is initiated and received or
otherwise made is expressly authorized by and complies with the requirements of –
(I) the applicable tribal ordinance or resolution approved by the Chairman of the
National Indian Gaming Commission; and
(II) with respect to class III gaming, the applicable Tribal-State Compact;
(iii) the applicable tribal ordinance or resolution or Tribal-State compact includes –
(I) age and location verification requirements reasonably designed to block access to
minors and persons located out of the applicable Tribal lands; and
(II) appropriate data security standards to prevent unauthorized access by any person
whose age and current location has not been verified in accordance with the
applicable tribal ordinance or resolution or Tribal-State Compact; and
(iv) the bet or wager does not violate any provision of –
(I) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);
(II) chapter 178 of title 28 (commonly known as the “Professional and Amateur
Sports Protection Act”);
(III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or
(IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).
(D) Interstate horseracing .–
(i) In general.– The term “unlawful Internet gambling” shall not include any activity that
is allowed under the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.).
(ii) Rule of construction regarding preemption.– Nothing in this subchapter may be
construed to preempt any State law prohibiting gambling.
(iii) Sense of Congress.– It is the sense of Congress that this subchapter shall not change
which activities related to horse racing may or may not be allowed under Federal law.
This subparagraph is intended to address concerns that this subchapter could have the
effect of changing the existing relationship between the Interstate Horseracing Act





and other Federal statutes in effect on the date of the enactment of this subchapter.
This subchapter is not intended to change that relationship. This subchapter is not
intended to resolve any existing disagreements over how to interpret the relationship
between the Interstate Horseracing Act and other Federal statutes.
(E) Intermediate routing.– The intermediate routing of electronic data shall not determine the
location or locations in which a bet or wager is initiated, received, or otherwise made.
(11) Other terms.–
(A) Credit; creditor; credit card; and card issuer.– The terms “credit”, “creditor”, “credit card”,
and “card issuer” have the meanings given the terms in section 103 of the Truth in Lending Act
(15 U.S.C. 1602).
(B) Electronic fund transfer.– The term “electronic fund transfer”–
(i) has the meaning given the term in section 903 of the Electronic Fund Transfer Act (15
U.S.C. 1693a), except that the term includes transfers that would otherwise be
excluded under section 903(6)(E) of that Act; and
(ii) includes any fund transfer covered by Article 4A of the Uniform Commercial Code,
as in effect in any State.
(C) Financial institution.– The term “financial institution” has the meaning given the term in
section 903 of the Electronic Fund Transfer Act, except that such term does not include a casino,
sports book, or other business at or through which bets or wagers may be placed or received.
(D) Insured depository institution.– The term “insured depository institution”–
(i) has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(c)); and
(ii) includes an insured credit union (as defined in section 101 of the Federal Credit
Union Act).
(E) Money transmitting business and money transmitting service.– The terms “money
transmitting business” and “money transmitting service” have the meanings given the terms in
section 5330(d) (determined without regard to any regulations prescribed by the Secretary
thereunder).






Books & Articles
Balestra & Cabot, INTERNET GAMBLING REPORT (6th ed. 2003)
Berman & Weitzner, Abundance and User Control: Renewing the Democratic Heart of the First
Amendment in the Age of Interactive Media, 104 YALE LAW JOURNAL 1619 (1995)
Branscomb, Anonymity, Autonomy, and Accountability: Challenges to the First Amendment in
Cyberspaces, 104 YALE LAW JOURNAL 1639 (1995)
Charney & Alexander, Legal Issues in Cyberspace: Hazards on the Information Superhighway:
Computer Crime, 45 EMORY LAW JOURNAL 931 (1996)
Friedrich, Internet Casino Gambling: The Nightmare of Lawmaking, Jurisdiction, Enforcement &
the Dangers of Prohibition, 11 COMMLAW CONSPECTUS 369 (2003)
Froomkin, Flood Control on the Information Ocean: Living with Anonymity, Digital Cash, and
Distributed Databases, 15 JOURNAL OF LAW & COMMERCE 395, 415-16 (1996)
Getszendanner, Judicial “Pruning” of “Garden Variety Fraud Civil RICO Cases Does Not Work:
Its Time for Congress to Act, 43 VANDERBILT LAW REVIEW 673 (1990)
Goldstein, On-Line Gambling: Down to the Wire? 8 MARQUETTE SPORTS LAW JOURNAL 1 (1997)
Keller, The Game’s the Same: Why Gambling in Cyberspace Violates Federal Law, 108 YALE
LAW JOURNAL 1569 (1999)
Kelly, Internet Gambling Law, 26 WILLIAM MITCHELL LAW REVIEW 117 (2000)
Krattenmaker & Powe, Converging First Amendment Principles for Converging Communications
Media, 104 YALE LAW JOURNAL 1719 (1995)
LaFave & Scott, CRIMINAL LAW 491-94 (1972)
Lawrence, Toward a More Coherent Dormant Commerce Clause: A Proposed Unitary
Framework, 21 HARVARD JOURNAL OF LAW AND PUBLIC POLICY 395 (1998)
Lessig, The Path of Cyberlaw, 104 YALE LAW JOURNAL 1743 (1995)
Lessig & Resnick, Zoning Speech on the Internet: A Legal and Technical Model, 98 MICHIGAN
LAW REVIEW 395 (1999)
National Association of Attorneys’ General, Gambling on the Internet (1996)
Perkins & Boyce, CRIMINAL LAW 698-92 (1982)
Rose & Owens, INTERNET GAMBLING LAW (2005)





Schwartz, The Internet Gambling Fallacy Craps Out, 14 BERKELEY TECHNOLOGY LAW JOURNAL

1021 (1999)


Soma, Banker, & Smith, Computer Crime: Substantive Statutes and Technical and Legal Search
Considerations, 39 AIR FORCE LAW REVIEW 225 (1996)
Sanders, The Regulation of Indecent Material Accessible to Children on the Internet: Is It Really
Alright to Yell Fire in a Crowded Chat Room? 39 CATHOLIC LAWYER 125 (1999)
Tien, Who’s Afraid of Anonymous Speech? McIntyre and the Internet, 75 OREGON LAW REVIEW

117 (1996)


Tratos, Gaming on the Internet 3 STANFORD JOURNAL OF LAW, BUSINESS AND FINANCE 101
(1997)
United States Congress, Internet Crimes Affecting Consumers: Hearing Before the Subcomm. on th
Technology, Terrorism, and Government Information of the Senate Comm. on the Judiciary, 105
Cong. (1997)
_____, The Internet Gambling Act of 1997: Hearing Before the Subcomm. on Technology, th
Terrorism, and Government Information of the Senate Comm. on the Judiciary, 105 Cong.
(1997)
_____, Internet Gambling Prohibition Act of 1997: Hearings Before the Subcomm. on Crime of th
the House Comm. on the Judiciary, 105 Cong. (1998)
_____, Internet Gambling: Hearing Before the Subcomm. on Technology, Terrorism, and th
Government Information of the Senate Comm. on the Judiciary, 106 Cong. (1999)
_____, Internet Gambling: Hearing Before the Senate Comm. on Indian Affairs, 106th Cong.
(1999)
_____, Internet Gambling Prohibition Act of 1999: Hearing Before the Subcomm. on Crime of the th
House Comm. on the Judiciary, 106 Cong. (2000)
_____, Internet Gambling Prohibition Act of 1999: Hearing Before the Subcomm. on th
Telecommunications, Trade and Consumer Protection of the House Comm. on Commerce, 106
Cong., (2000)
_____, H.R. 4419 – Internet Gambling Prohibition Act: Hearing Before the House Comm. on th
Banking and Financial Services, 106 Cong. (2000)
_____, Financial Aspects of Internet Gaming: Good Gamble or Bad Bet? Hearing Before the th
Subcomm. on Oversight and Investigations of the House Comm. on Financial Services, 107
Cong. (2001)
_____, Unlawful Internet Gambling Funding Prohibition Act and the Combating Illegal
Gambling Reform and Modernization Act: Hearing Before the Subcomm. on Crime of the House th
Comm. on the Judiciary, 107 Cong. (2001)





_____, H.R.; 556 – The Unlawful Internet Gambling Funding Prohibition Act and Other Internet
Gambling Proposals: Hearing Before the Subcomm. on Financial Institutions and Consumer th
Credit of the House Comm. on Financial Services, 107 Cong. (2001)
_____, Proposals to Regulate Illegal Internet Gambling: Hearing Before the Senate Comm. on th
Banking, Housing, and Urban Affairs, 108 Cong. (2003)
_____, Unlawful Internet Gambling Funding Prohibition Act and the Internet Gambling th
Licensing and Regulation Commission Act, 108 Cong. (2003)
_____, Internet Gambling Prohibition Act of 2006: Hearing Before the Subcomm. on Crime, th
Terrorism, and Homeland Security of the House Comm. on the Judiciary, 109 Cong. (2006)
United States Department of Justice Computer Search and Seizure Working Group, Federal
Guidelines for Searching and Seizing Computers, printed in 56 BNA CRIMINAL LAW REPORTER

2023 (Dec. 21, 1994)


United States Department of State, Treaties in Force: A List of Treaties and Other International
Agreements of the United States in Force on January 1, 2003
United States General Accounting Office [now United States Government Accountability Office],
Internet Gambling: An Overview of the Issues (GAO-03-89)(December 2002)
_____, Money Laundering: Rapid Growth of Casinos Makes Them Vulnerable (GAO/GGD-96-

28)(January 1996)


Volokh, Cheap Speech and What It Will Do, 104 YALE LAW JOURNAL 1805 (1995)

4 WHARTONS CRIMINAL LAW §731 (1981)


World Trade Organization, United States – Measures Affecting the Cross-Border Supply of
Gambling and Betting Services: Report of the Panel (November 10, 2004)
Notes & Comments
All Bets Are Off(Line): Antigua’s Trouble in Virtual Paradise, 35 UNIVERSITY OF MIAMI INTER-
AMERICAN LAW REVIEW 367 (2004)
American Libraries Association v. Pataki: Will States Be Prohibited from Internet Regulations, 18
JOURNAL OF LAW AND COMMERCE 151 (1998)
Anonymity and International Law Enforcement in Cyberspace, 7 FORDHAM INTELLECTUAL
PROPERTY, MEDIA & ENTERTAINMENT JOURNAL 231, 265-66 (1996)
Betting on the Net: An Analysis of the Government’s Role in Addressing Internet Gambling, 51
FEDERAL COMMUNICATIONS LAW JOURNAL 449 (1999)
Blackjack or Bust: Can U.S. Law Stop Internet Gambling? 16 LOYOLA OF LOS ANGELES
ENTERTAINMENT LAW JOURNAL 667, 671-72 (1996)





Coins, Notes, and Bits: The Case for Legal Tender on the Internet, 10 HARVARD JOURNAL OF
LAW & TECHNOLOGY 321 (1997)
Cryptography and the First Amendment: The Right to Be Unheard, 14 JOHN MARSHALL
JOURNAL OF COMPUTER & INFORMATION LAW 325 (1996)
Cyberspace, General Searches, and Digital Contraband: The Fourth Amendment and the Net-
Wide Search, 105 YALE LAW JOURNAL 1093 (1996)
Do Not Bet on Unilateral Prohibition of Internet Gambling to Eliminate Cyber-Casinos, 1999
UNIVERSITY OF ILLINOIS LAW REVIEW 1045
Establishing Legal Accountability for Anonymous Communication in Cyberspace, 96 COLUMBIA
LAW REVIEW 1526 (1996)
CRS Report 94-166, Extraterritorial Application of American Criminal Law, by Charles Doyle.
Five or More Persons, Requirement of 18 USCS §1955, Prohibiting Illegal Gambling Businesses,
That Such Businesses Involve Five or More Persons, 55 ALR FED. 778
Eighteenth Survey of White Collar Crime: Computer Crime, 40 AMERICAN CRIMINAL LAW
REVIEW 285 (2003)
Eighteenth Survey of White Collar Crime: Money Laundering, 40 AMERICAN CRIMINAL LAW
REVIEW 847 (2003)
Eighteenth Survey of White Collar Crime: Racketeer Influenced and Corrupt Organizations, 40
AMERICAN CRIMINAL LAW REVIEW 987 (2003)
Freedom to Speak Unintelligibly: The First Amendment Implications of Government-Controlled
Encryption, 4 WILLIAM & MARY BILL OF RIGHTS JOURNAL 1165 (1996)
A Full Laundering Cycle Is Required: Plowing Back the Proceeds to Carry on Crime Is a Crime
Under 18 U.S.C. 1956(a)(1)(A)(i), 70 NOTRE DAME LAW REVIEW 891 (1995)
A Game of High Stakes Roulette: Credit Card Companies Cash in on Gamblers’ Bad Luck, 32
JOHN MARSHALL LAW REVIEW 1197 (1999)
Gambling On-Line: For a Hundred Dollars, I Bet You Government Regulation Will Not Stop the
Newest Form of Gambling, 22 UNIVERSITY OF DAYTON LAW REVIEW 163 (1996)
Growth of Internet-Based Gambling Raises Questions for Bank Systems, BNA’S ELECTRONIC
INFORMATION POLICY & LAW REPORT (Feb. 28, 1997)
Home Is Where Your Modem Is: An Appropriate Application of Search and Seizure Law to
Electronic Mail, 34 AMERICAN CRIMINAL LAW REVIEW 163 (1996)
Interstate Transportation or Travel, Validity, Construction and Effect of 18 USCS §1952, Making
It a Federal Offense to Use Interstate or Foreign Travel or Transportation in Aid of Racketeering
Enterprises, 1 ALR FED. 838





Jurisdiction and the Internet: Fundamental Fairness in the Networked World of Cyberspace, 6
ALBANY LAW JOURNAL OF SCIENCE & TECHNOLOGY 330 (1996)
Money Laundering and Drug Trafficking: A Question of Understanding the Elements of the
Crime and the Use of Circumstantial Evidence, 28 UNIVERSITY OF RICHMOND LAW REVIEW 255
(1994)
Requirement of 18 U.S.C. §1955, Prohibiting Illegal Gambling Business, That Such Business
Involve Five or More Persons, 51 ALR FED. 778
Searches and Seizures of Computers and Computer Data, 8 HARVARD JOURNAL OF LAW &
TECHNOLOGY 75 (1994)
State Regulatory Jurisdiction and the Internet: Letting the Dormant Commerce Clause Lie, 52
VANDERBILT LAW REVIEW 1095 (1999)
Transmission of Wagering Information, Validity of 18 USCS §1084(a) Making It Criminal
Offense, 5 ALR FED. 166
Validity, Construction, and Application of 18 USCS §1956, Which Criminalizes Money
Laundering, 121 ALR FED 525
World Wide Wager: The Feasibility of Internet Gambling Regulation, 8 SETON HALL
CONSTITUTIONAL LAW JOURNAL 815 (1998)
Charles Doyle
Senior Specialist in American Public Law
cdoyle@crs.loc.gov, 7-6968