Traditionally, gambling regulation in the United States has been reserved for the state governments. As is the case with the Wire Act, however, sometimes federal law supercedes state law. The Department of Justice has on many occasions expressed its belief that the Wire Act prohibits all forms of online gambling in all U.S. states. The Wire Act was enacted in 1961 to prevent bookmakers from accepting sports bets over the telephone. Accusations of Wire Act violations are usually accompanied by other charges, including conspiracy, money laundering, and violations of the RICO Act, Travel Act, and Illegal Gambling Business Act. Enforcement of the Wire Act is directed at the gambling operator, and there is no language that makes it illegal for a consumer to place a wager. Because the Act was written in 1961, its language it limited to communication systems that use wires, and the types of betting it describes are limited to fixed odds propositions such as ones offered on sporting and other events. It simply was not possible to have foreseen remote casino and poker games as far back as 1961, so taken literally, the language of the Wire Act is not adequate to apply to casino gaming and poker over the Internet. In a case involving online casino gamblers who tried to get their credit card debts ruled unenforceable because their online casino gambling had been illegal, the U.S. Court of Appeals for the Fifth Circuit (Louisiana) declared in 2002 that gambling losses were indeed enforceable because "the Wire Act does not prohibit non-sports Internet gambling." The DOJ disagrees with the Fifth Circuit Court of Appeals decision, and the Wire Act still serves as the foundation for all of the DOJ`s arguments against the legality of Internet gambling for both sports wagering and non-sports wagering. DOJ officials have asserted the belief when advising the U.S.<br><br>

Virgin Islands and the states of Nevada and North Dakota against regulating online gaming and when threatening to prosecute media companies who advertised for online gambling companies with aiding and abetting an illegal activity in 2002. The DOJ was successful in convicting Jay Cohen, president of the World Sports Exchange for Wire Act violations in 2000. In the fall of 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), which makes it illegal for financial institutions to facilitate payment transactions between offshore gambling operations and American customers. The law says nothing about it being illegal for a person located in the U.S. to gamble on an Internet site, however. The Federal Reserve and Treasury are now in the midst of drafting the regulations under which this new law will be enforced. There is speculation that the regulations may exempt banks from the use of paper checks, electronic checks, and ACH deposits because of the vast burden monitoring these payment forms would impose on them. The UIGEA has resulted in the online gambling indistry`s publicly listed companies withdrawing from the American market, but most of the private companies continue to serve it. These private companies are betting that the UIGEA will prove ineffective in blocking payments, and they continue to operate in jurisdictions outside the reach of the U.S. authorities. Federal gambling law does not address games of skill. Internet gambling on horse racing is permitted by the Interstate Horse Racing Act in states that have chosen to regulate such wagering. Although the DOJ insists that the Act is not consistent with the Wire Act, it has never filed charges against any of the many domestic remote horse wagering operators. Internet horse race wagering has been specifically legalized in the states of California, Nevada, Oregon, and South Dakota.