The Game's the Same: Why Gambling in Cyberspace Violates Federal Law

Article excerpt


For more than a century, Americans have believed that the social ills fostered by gambling outweigh its recreational value.(1) As a result, gambling has been extensively regulated in order to restrict access to, and control the operation of, legalized gambling facilities.(2)

These restrictions, however, have not diminished gambling's popularity.(3) Moreover, significant technological developments, most notably the Internet, threaten to circumvent the current regulatory approach in ways that were unimaginable just a few years ago. Unlike brick-and-mortar casinos, the action at "virtual casinos" and in other forms of online gambling(4) is nonstop and accessible to anyone with Internet access.(5) Bets can be placed anonymously or pseudonymously, regardless of the bettor's age, sobriety, or finances. Moreover, unlike lawful domestic gambling operations, many Internet gambling sites operate from servers in foreign countries that are unsupervised by U.S. government regulators.

The sudden and ready accessibility of Internet gambling has the potential to turn every home and office into a gambling parlor. Such widespread, unsupervised, and unregulated access, however, is completely inconsistent with a regulatory model that frowns on teenagers playing lotteries or entering casinos.(6) Thus, the government's interest in regulating Internet gambling is at least as strong as, if not stronger than, its interest in regulating gambling in its traditional forms.(7)

There are, however, at least two related schools of thought rejecting this view. First, many commentators believe that the unique attributes of the Internet, not the least of which is its inherently transborder nature, require it to be treated as a separate and sovereign jurisdiction where traditional legal approaches should not apply.(8)

Second, operators of online gambling sites offer a specific variation on this theme. They maintain that they escape U.S. law by locating their server and related operations offshore--in countries such as Belize, Curacao, and Antigua--making it irrelevant that their American customers are playing in Peoria. As one Internet gambling operator has put it:

   All wagers take place in Antigua on our server. No money is transferred on
   a bet by bet basis. People must open accounts and wager from their
   accounts. When players bet they are directing a foreign transaction, no
   different than moving money from one offshore business to another.... The
   bet takes place in Antigua. The money is already here.... They are making a
   virtual visit to Antigua.(9)

These arguments are echoed in various law review articles that call for the creation of new Internet legal models. Commentators raise the concern that, without such a new framework, the Internet's transborder nature and unique mores virtually ensure that no "stable body of jurisprudence" can be developed.(10)

The weakness underlying all of these arguments is that they accept too literally the concept of "cyberspace" as an actual "place." In so doing, they embrace a metaphor that is far from exclusive and, in many ways, far from appropriate. For example, competing with the term "cyberspace" is the description of the Internet as an "information superhighway."(11) Other metaphors and analogies abound.(12)

As Professor Clay Calvert has recognized, one of the problems with using metaphors to describe online activities is that the metaphor can replace the reality and thus "frame our thinking too narrowly."(13) Thus, although it may be colorful, it is not analytically useful to think of the Internet as a transportation vehicle in which one makes "virtual" voyages.(14) To the contrary, the Internet is an earthbound network of interconnected computers, each with a specific physical location, connected by a physical telecommunications backbone. One no more makes a "virtual visit" when using the Internet than when telephoning long distance. …