Illegal online gamling violates federal criminal statutes. Although gambling is largely a state matter, federal law supports and reinforces state law in a number of cases. State officials have expressed concerns about the Internet’s potential to bring illegal gambling into their states. A few of these cases have led to recent legislation.
One example is the seizure of $3.2 million by U.S. marshals from a company that accepted advertisements from Tropical Paradise, a Costa Rican casino operation. This case also involved PayPal, which was warned by federal prosecutors that it could face prosecution if it continued to accept advertisements from such companies.