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Understanding the prohibition of illegal gambling businesses

On Behalf of | Apr 25, 2024 | Criminal Defense

The law in the U.S. is strict on illegal gambling. Federal statutes clearly define what constitutes an illegal gambling business and the penalties for those involved in such activities. If someone conducts, finances, manages, supervises, directs or owns all or part of an illegal gambling business, they may face serious legal consequences.

It’s important to understand how serious this matter is to avoid participating in such a business or know how to respond if faced with charges.

Defining illegal gambling businesses

Federal law describes an “illegal gambling business” as a gambling operation involving five or more people, running for over 30 days, or bringing in more than $2,000 in a single day. This law covers a range of gambling activities, such as:

  • Running a pool
  • Taking bets on sports or other events (bookmaking)
  • Having slot machines, roulette wheels or dice tables
  • Organizing lotteries or bolita games
  • Selling lottery tickets

If a person runs a business—either covertly or openly—like these, it may be an illegal gambling business. No matter the size, these businesses are breaking the law.

Exceptions to the law

This law has a limitation. Some tax-exempt organizations, like certain non-profits, can conduct games like bingo or lotteries without breaking the law. But there’s a condition. The earnings from these games can’t financially benefit any private shareholder, member or employee of the organization.

The only exception is to reimburse the costs they spent to run these games. The organization could be breaking the law if any funds benefit an individual beyond covering costs.

Consequences of running an illegal gambling business

The punishments for running an illegal gambling business are severe. People who break this law can face imprisonment for up to five years, fines that vary based on their case’s specifics, or both. In addition, any property, including money, used in violation of this law may be seized and forfeited to the U.S.

Those facing charges of running an illegal gambling business, such as maintaining slot machines or conducting lotteries, should consider seeking a legal professional. They can help them understand the federal laws and work to lessen the potential penalties.