Common carriers
While there are rules on the Internet that govern common carriers, it is possible for social networks and gaming sites to block gambling activities. These sites may also block users for violating their rules. Under federal law, these companies must obey blocking requests. However, internet service providers are not common carriers, and they are unlikely to comply with a Minnesota request to prevent online gambling. John Morris, general counsel of the Center for Democracy and Technology, notes that the law is likely to apply to phone companies that directly do business with bet-takers. Nevertheless, restrictions on online gambling in the United States have already forced some gaming sites to move their operations overseas.
In response, some academics have suggested that social media sites be regulated as common carriers. This would be a misguided approach, since social media websites do not meet common carrier criteria.
Commerce Clause
Attempts to restrict federal gambling laws have been challenged on constitutional grounds, including the First Amendment, Commerce Clause, and Due Process Clause. The First Amendment protects the freedom of speech, while the Commerce Clause grants Congress the power to regulate commerce, including making laws relating to it. The Due Process Clause protects an individual’s interest in liberty.
Nevertheless, the Commerce Clause is not a panacea for online gambling. There are many nuances to consider, and the Commerce Clause has a complex history of conflicting interpretations. A legal scholar once said that the Commerce Clause is “a nuclear bomb” of legal theory.
Due Process Clause
The Due Process Clause protects consumers from unfair and unjust treatment, including discrimination. In the case of online gambling, this means that states can pass laws that limit their online gambling operations. However, there are limits to these protections. In some cases, states can ban online gambling entirely. In other cases, the state may permit it, but this requires certain restrictions.
A common example is the issue of professional gamblers. They can’t claim a tax deduction for their losses, even if they’re winning. In order to do this, they must show that they have a winning track record. And to win the case, they need to win in appeals and in the US Supreme Court.
First Amendment
A legal challenge to the enforcement of federal gambling laws has focused on the First Amendment and the Commerce Clause. The First Amendment protects speech and expression and the Commerce Clause gives Congress the power to regulate commerce and enact laws affecting it. Moreover, the Due Process Clause protects the liberty interest of an individual.
However, Section 1956 imposes new restrictions. Among other things, it criminalizes a player who posts illegal activity on a social network. This is often done in order to evade taxes, conceal or disguise illegal activity, or carry out law enforcement stings. This provision has generated constitutional objections to prosecuting illegal Internet gambling, and questions about the scope of legislative power under the Commerce Clause.