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Extracted from: Internet Gambling in Nevada: Overview of Federal Law Affecting Assembly Bill 466,
Courtesy of Liebert Publishing, Gambling Law Review

Transportation of Gambling Devices Act of 1951.

In 1951, Congress enacted the Transportation of Gambling Devices Act. [236] The Act, more commonly known as the Johnson Act, [237] which has been amended several times during the intervening years, makes it unlawful to knowingly transport a gambling device to a state where such a device is prohibited by law. [238] The manufacturers and distributors of gaming devices for interstate commerce must register each year with the United States Department of Justice, and the devices must be appropriately marked for shipment. [239]

(a) The term "gambling device" means--

(1) any so-called "slot machine" or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and

(A) which when operated may deliver, as the result of the application of an element of chance, any money or property, or

(B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or

(2) any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and

(A) which when operated may deliver, as the result of the application of an element of chance, any money or property, or

(B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or

(3) any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine or mechanical device as a constituent part. [240]

The interstate shipment of hardware or software for use in connection with an Internet or Interactive gaming system may trigger the Johnson Act, as well as the Interstate Transportation of Wagering Paraphernalia Act discussed above. [241]

Bank Records and Foreign Transaction Act of 1970.

In 1970, Congress passed the Bank Records and Foreign Transaction Act, [242] which is better known as the Bank Secrecy Act (BSA). [243]  The BSA required "financial institutions" to report all currency transactions greater than $10,000 in effort to fight money laundering. This obligation was first limited to just banks. In 1985, the United States Treasury Department extended the requirement to casinos through the adoption of regulations. [244]  Nevada casinos enjoy an exemption from the CTR reporting requirements of the BSA. [245] 

Internet or interactive casinos will certainly be subject to some form of currency reporting requirement whether it is the BSA or Nevada Gaming Commission Regulation 6A, or both.

Money Laundering Control Act of 1986.

In 1986, Congress enacted the Money Laundering Control Act, [246] codified at 18 U.S.C. 1956, 1957. Section 1956 applies to the knowing and intentional laundering of monetary instruments. [247]  Section 1957 pertains to monetary transactions involving property that is "derived from specified unlawful activity," which includes "racketeering activity" under RICO. [248]

Electronic Communications Privacy Act of 1986.

In 1986, Congress enacted the Electronic Communications Privacy Act (ECPA), [249] codified at 18 U.S.C. 2510 et seq. The legislation amended Title 18 of the United States Code to extend the prohibition against the unauthorized interception of communications from wire and oral communications to "electronic communications," which are defined as:

"electronic communication" means any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce, but does not include--

(A) any wire or oral communication;

(B) any communication made through a tone only paging device;

(C) any communication from a tracking device (as defined in section 3117 of this title); or

(D) electronic funds transfer information stored by a financial institution in a communications system used for the electronic storage and transfer of funds. [250]

The term "intercept" means "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." [251] 

ECPA provides exceptions for the law enforcement to intercept communications where either (1) law enforcement is a party to the communication, or (2) where one of the parties to the communication has given prior consent to such interception. [252]  The Nevada Gaming Control Board and Nevada Gaming Commission could take advantage of this exemption and be excluded from the reach of ECPA either through the promulgation of a regulatory provision (i.e., that licensees will permit the Board and Commission to monitor all electronic communications with patrons) or by imposing conditions on the licenses o f operators of Interactive gaming.


End notes:

[236]    See Act of January 2, 1951, ch. 1194, 1, 64 Stat. 1134.

[237]    See 15 U.S.C. 1171-1178.

[238]    See 15 U.S.C. 1172.

[239]    See 15 U.S.C. 1173, 1174.

[240]    15 U.S.C. 1171(a).

[241]    See Nicholas Robbins, Baby Needs a New Pair of Cybershoes: The Legality of Casino Gambling on the Internet, supra, n. 97.

[242]    See Bank Records and Foreign Transportation Act, Pub. L. No. 91-508, 202, 84 Stat. 1118.

[243]    See 31 U.S.C. 5311-5326.

[244]    See 31 C.F.R. 103.11(n)(7)(i).

[245]    See 31 U.S.C. 5318(a)(5); see also Nev. Gaming Comm'n Reg. 6A.030

[246]    See Money Laundering Control Act, Pub. L. No. 99-570, 1352(a) (1986).

[247]    See 18 U.S.C. 1956(a)(1).

[248]    18 U.S.C. 1957(a); see also 18 U.S.C. 1956(c)(7)(A).

[249]    See Electronic Communications Privacy Act, Pub. L. No. 99-508, 101 (1986).

[250]    18 U.S.C. 2510(12).

[251]    18 U.S.C. 2510(4).

[252]    See 18 U.S.C. 2511(2)(c).