Inappropriate Criminal Usage of The Internet Gambling in The US
Second, computer hackers or gambling operators may tamper with gambling software to manipulate games to their benefit. Unlike the physical world of highly regulated resort-destination casinos, assessing the integrity of Internet operators is quite difficult. Background checks for licensing in foreign jurisdictions are seldom as thorough as they are in the United States. Furthermore, the global dispersion of Internet gambling operations makes the vigilant regulation of the algorithms of Internet games nearly impossible.
Third, gambling on the Internet may provide an easy means for money laundering. Internet gambling provides anonymity, remote access, and encrypted data. 28 To launder money, a person need only deposit money into an offshore account, use those funds to gamble, lose a small percent of the original funds, then cash out the remaining funds. Through the dual protection of encryption and anonymity, much of this activity can take place undetected. In a study prepared for the Office of Science and Technology Policy and the Financial Crimes Enforcement Network of the Critical Technologies Institute, David A. Mussington and colleagues examined the potential for money laundering on the Internet. The study raises several essential concerns regarding the use of the Internet for money-laundering activities, including the lack of uniform international law and oversight or regulatory regime, the fluidity of funds crossing international borders, and the high degree of anonymity. 29
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. 30
This section makes illegal the use of wire communications to place or assist with placing bets or wagers. However, ambiguity does make its appearance. The section of the statute immediately following the quoted passage exempts the use of a wire communication facility to report on, provide information for, or assist with the placing of bets or wagers “from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country which such betting is legal.” 31 The statute also outlines the obligation of communications carriers to discontinue providing services once notified of the illegal activity. 32
The applicability of 18 U. S. C. § 1084 to Internet gambling has given rise to a number of disputes over the past few years. For example, does the phrase “wire communications” include the Internet? Does the specific mention of “sports wagering” and “contests” include all types of gambling on the Internet? When placing a bet on the Internet, where does jurisdictional authority reside?
28 Richard Harms, Ph. D., PriceWaterhouseCoopers, Director in Investigative Services, Remarks at the Second International Symposium on Internet Gambling Law & Management (Nov. 30, 1998). Most messages, especially those containing sensitive information such as financial data, use encryption, a process of encoding messages, thereby preventing access of information by unintended readers. The most commonly used encryption language on the Internet is the Secure Socket Layer (SSL) protocol. This encoded language can layer itself on top of other protocols, such as TCP/ IP. For further discussion, see Internet Security and Secure Servers at http: rho. pmel. noaa. gov/ help/ HELPSECURITY. HTML. 29 David A. Mussington, et al., “Exploring Money Laundering Vulnerabilities Through Emerging Cyberspace Technologies: A Caribbean-Based Exercise.” STATE OF THE LAW: THE APPLICABILITY OF 18 U. S. C. § 1084 Presently, the most widely applied federal statute addressing gambling on the Internet is 18 U. S. C. § 1084. According to this statute, 30 Wire Communications Act of 1961, 18 U. S. C. § 1084 a (1998). 31 Ibid. 32 Wire Communications Act of 1961, 18 U. S. C. § 1084 a (1998). 6