	Introduction

Gambling, once widely outlawed, is now a heavily regulated, taxed activity that is legal in some form in all states except Hawaii and Utah. While state governments have the main responsibility for overseeing gambling, Congress historically has played a significant role in shaping the industry. The Evolution of Remote Gambling

Like so many other industries, the gambling industry has been transformed by developments in computing and telecommunications. In 2003, the U.S. Department of Justice (DOJ) warned media outlets that running advertisements for gambling websites could violate the Wire Act. In 2006, partly in response to the recommendations of a congressionally created commission, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA; P.L. 109-347 ). The law bars gambling-related businesses from accepting payment that is outlawed by state or federal statutes. However, UIGEA does not outlaw any specific types of gambling over the Internet, and allows states and tribes to continue or initiate Internet gambling within their borders if they apply certain safeguards. While UIGEA included exceptions for intrastate online betting such as horse racing, "fantasy" sports, and online lotteries, it did not clarify the scope of older laws that DOJ has used to prosecute Internet gambling, such as the Wire Act. A number of states and tribes have taken advantage of the DOJ memo to allow online betting on horse races and Internet lotteries. Georgia and Illinois already sell lottery tickets online, and several others have considered whether to offer online lottery sales, among them New Jersey and Florida. Interest groups and gaming companies are at odds over remote gambling. These interests formed the Coalition for Consumer and Online Protection in 2014. Aligned against them are others, including most prominently the Coalition to Stop Internet Gambling. Opponents of legislation to expand remote gaming cite the potential for an increase in problem gambling if the ease of online gambling encourages even more people to gamble. That legislation would have imposed a license fee for online gambling operations equal to 2% of all funds deposited by customers into special accounts that could be used for online wagering, and it would have given states and tribes the option of accepting from licensees, on a monthly basis, an online gambling fee "equal to 6 percent of all deposited funds deposited by customers residing in each State or area subject to the jurisdiction of an Indian tribal government." The draft called for the establishment of a new regulatory body, the Office of Online Poker Oversight in the Department of Commerce. In the 113 th Congress, the Restoration of America's Wire Act ( S. 2159 and H.R. 4301 ), introduced by Senator Lindsey Graham and a companion bill by Representative Jason Chaffetz, would amend the Wire Act to prohibit all forms of Internet gambling in the United States, including in the three states where online gambling has already been licensed and regulated. 2282 ), which would create an Office of Internet Gambling Oversight (OIGO) in the Department of the Treasury to oversee state and tribal agencies that license and regulate online gambling operators. States began to legalize bingo games in the 1930s, and Nevada legalized casino gambling in 1931.
Gambling, once widely outlawed, is now a regulated, taxed activity that is legal in some form—bingo, card games, slot machines, state-run lotteries, casinos, and even online—in all but two states. Like so many other industries, the gambling industry is being transformed by technology that has begun to shift patronage from casinos, bingo halls, or stores selling lottery tickets to desktop computers and tablets connected to the Internet and to mobile devices that may communicate by telephone or direct satellite links. This report discusses remote gambling and the likely implications for the broader gambling industry.
State governments have the main responsibility for overseeing gambling, but Congress historically has played a key role in shaping the industry. The Unlawful Internet Gambling Enforcement Act (UIGEA; P.L. 109-347) of 2006 prevents payments to illegal gambling-related businesses, but does not outlaw all forms of remote gambling. It allows states and Indian tribes to offer remote gambling within their territory if certain conditions are met. A majority of states allow Internet betting on horse racing, and a few now permit Internet lottery ticket games. A number of Indian tribes and gaming companies have created entities to develop remote gambling, and seem likely to expand them rapidly if the legal issues are clarified.
Another major development was the U.S. Department of Justice (DOJ) clarification of the scope of long-standing laws it has used to prosecute Internet gambling, including the 1961 Wire Act. In December 2011, a DOJ interpretation of the Wire Act authorized states to allow online gambling, except for sports betting. Since then, Delaware, New Jersey, and Nevada have implemented online gambling programs within their borders. Several more states are considering whether to legalize online gambling, and some have laws that expressly prohibit online gaming.
Several of the larger casino operators favor expanded remote gambling. Proponents have formed the Coalition for Consumer and Online Protection, which asserts the need for comprehensive national regulation and points to anticipated federal revenue from taxes and registration fees generated by authorized remote gambling sites. In the 113th Congress, bills have been introduced that would allow and tax remote gaming nationwide, and create a new federal department to oversee online gambling, with proposals for either an Office of Internet Poker Oversight in the Department of Commerce or an Office of Internet Gambling Oversight in the Department of the Treasury. An opposing group that also includes prominent casino owners, the Coalition to Stop Internet Gambling, supports the Restoration of America's Wire Act (S. 2159 and H.R. 4301), which would expressly prohibit all online gambling in the United States. Opponents are concerned that a national online gaming market could draw customers away from traditional casino operations, and that remote gambling could result in increased fraud and money laundering. Congress also faces consideration of the balance of federal and state regulation and the possible social costs of expanded gaming, including problem gambling.