During the late 1990s, online gambling began to gain popularity. In fact, according to a Frost & Sullivan report, online gambling revenues reached $830 million in 1998. However, state officials were concerned that online gambling could be used to bring illegal gambling into their jurisdictions.
In response, the United States Department of Justice announced that it would enforce the Wire Act on all forms of Internet gambling. In addition, it would prohibit the use of financial instruments in illegal Internet bets. This was the first step toward criminalizing online gambling.
However, some opponents say that the move has no legal basis. They also argue that it encroaches on free speech objections. It also raises questions about the entanglement of state and federal law.
In response to this, Congress drafted a new law that would regulate remote gaming. The law also includes an element to weed out low-level gambling cases. The amendment is called the Lopez Amendment, and it comes with Congressional findings about the effects of the law on interstate commerce.
Although the law has not been fully implemented, it has been challenged on constitutional grounds. In one case, the United States marshals seized $3.2 million from the company Discovery Communications. The company accepted advertising from Tropical Paradise, a Costa Rican casino operation. In response, the company agreed to launch a $3 million public service campaign.
Similarly, another case involved the United States v. K23 Group Financial Services. In this case, the government charges that the operators of Internet poker rooms violated the UIGEA.