Federal Gambling Crimes and Related Offenses

Gambling has been part of our Nation's history for generations. As time goes on, new efforts are underway across the United States by local legislatures to legalize sports gambling. Nevertheless, the Federal criminal law still has several statutes on the books aimed at preventing illegal gambling.

18 U.S.C. § 1084 – Transmission of wagering information; penalties

In 1961, Congress passed the Interstate Wire Act to prohibit certain betting businesses and organized crime in the United States. Title 18 U.S.C. § 1084 makes it a crime for anyone involved in gambling to knowingly use interstate wires to receive money or credit from bets or wagers. The statute also punishes those who receive information to assist them in placing a bet or wager. Violators of this offense could face imprisonment up to two years, a fine, or both. The Wire Act and sports betting remain a divisive issue in the legal community. Just recently, the First Circuit Court of Appeals held in New Hampshire Lottery Commission v. Rosen that the Wire Act's reach extends only to bets and wagers in the context of a sporting event or contest, nothing more.

18 U.S.C. § 1952 - Interstate and foreign travel or transportation in aid of racketeering enterprises

An additional tool in Federal prosecutor's toolboxes is 18 U.S.C. § 1952, also known as the Travel Act, which prohibits using U.S. mail or interstate or foreign travel to commit certain criminal acts. In short, the Travel Act bars the distribution of proceeds of any unlawful activity or the promotion, management, establishment, carrying on, or facilitation of the promotion, management, establishment or carrying on, of any unlawful activity. But, of course, this begs the question, what is an "unlawful activity?" Essentially, an "unlawful activity" is any business enterprise involving gambling. This definition includes owners/operators of a gambling business and bettors. Violators of the Travel Act could face up to five years in prison and a $250,000 fine.

18 U.S.C. § 1955 – Conducting an Illegal Gambling Business

This provision makes it a crime for anyone who conducts, finances, manages, supervises, directors or owns all or part of an illegal gambling business. An "illegal gambling business" violates the law of the State in which it occurs, involves more than five persons, and remains in continuous operation for over 30 days, and generates $2,000 in gross revenue in any single day. Further, "gambling" includes things like pool-selling, bookmaking, slot machine maintenance, roulette wheels or dice tables, and lotteries, like policy, bolita, or selling chances. Be mindful that this offense only applies to "off-shore" Internet gambling enterprises if the bettor or operation has some connection with a State that prohibits such acts. Offenders of 18 U.S.C. § 1955 can face up to vie years in prison and a $250,000 fine.

Title 18 U.S.C. §§ 1961 and 1962 – RICO

RICO stands for the Racketeer Influenced and Corrupt Organizations Act, passed in 1970 to eradicate organized crime in the United States. Interestingly, RICO includes criminal and civil penalties for racketeering offenses part of a criminal enterprise, including money laundering, counterfeiting, and embezzlement. In addition, gambling crimes qualify as offenses under the RICO statutes.

To support a conviction, the government must show that:

  • An enterprise existed affecting interstate or foreign commerce;
  • The defendant participated in and was a member of the said enterprise; and
  • The defendant committed at least two instances of racketeering activity.
  • Violations of the RICO statute come with a possible 20-year prison sentence and a $250,000 fine.
31 U.S.C. § 5363 – Prohibition on acceptance of any financial instrument for unlawful Internet gambling

In 2006, Congress sought to impose strict measures aimed at Internet gambling by passing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Under the Act, it is a crime for any gambling business to knowingly accept payment from a person for a bet or wager placed on the Internet. In addition, Internet payment forms are restricted to credit cards and include electronic funds transfers, checks, and other forms of payment.

UIGEA offenders can face up to five years in federal prison.

Title 18 U.S.C. §§ 1956 and 1957 – Money Laundering

Money laundering occurs when someone makes large amounts of money (also known as "dirty money") from criminal activity and then attempts to hide or conceal the funds' source, amount, or destination. The point of concealing the true origins of the money is to make it appear to authorities that the money came from lawful sources. For example, in the context of gambling, Money Laundering perpetrators would look to conceal their gambling proceeds to avoid the attention of authorities.

One facing a money laundering charge risks a lengthy federal prison sentence and the need to pay significant amounts of money in restitution. A conviction under 18 U.S.C § 1856 comes with a possible prison term of 20 years and/or a fine of up to $500,000 or twice the value of the money that was laundered, whichever is greater. A conviction under 18 U.S.C. § 1957 carries a sentence of up to 10 years in federal prison.

Importance of Legal Counsel

If you or someone you know is facing a Federal Gambling offense, the idea of having to spend time in prison and pay financial penalties, the need to hire legal counsel is essential. As a former federal and state prosecutor, Peter Katz has spent much of his career as a prosecutor and knows the ins and outs of criminal defense. Engaging with defense counsel during the early stages of the investigation, you will have more leverage in preparing your defense.

Peter is ready to bring his over two decades of experience to your case and work tirelessly on your behalf to protect you and your rights. Call the Law Offices of Peter Katz at (609) 734-4380 or online to begin preparing your defense today.