When online gambling became popular in the 1990s, it was seen as an end-run around government regulation. Using an offshore jurisdiction, online gambling operators could operate their business from anywhere with a computer and an internet connection. Anyone with a credit card could visit an online casino and place a bet. Congress and the Department of Justice began exploring regulation of this type of gambling.

The legality of online gambling is a complex topic and varies from state to state. The Unlawful Internet Gambling Enforcement Act of 2006 restricts banks from transacting with illegal internet gambling sites, but it does not define what makes online gambling legal. In addition, a popular misconception is that the Federal Wire Act prohibits all online gambling, but this is not true. Online casinos, lottery sites, and poker sites are not covered by the Wire Act.

The federal government has several laws to protect consumers from the illegal gambling industry. In some cases, the government has imposed restrictions to protect consumers and businesses. In some states, such as New York, online gambling is prohibited. In other states, however, internet gambling is legal. The federal government does not regulate online gambling, but it does enforce state laws.