The United States Code addresses gambling as a federal crime in two primary contexts: racketeering and gambling ships. The first context, racketeering, encompasses illegal gambling activities in their colloquially understood form. Gambling ship offenses, in contrast, involve the use of a “gambling ship,” defined as any watercraft or aircraft used principally for the operation of gambling establishments.
18 U.S.C. §1955 prohibits illegal gambling businesses in the racketeering context. Under the statute, anyone who conducts, finances, manages, directs, owns, or supervises an illegal gambling business faces up to five years in prison, as well as fines under the title. Although federal law prohibits illegal gambling businesses, the legality of any such businesses rests on the laws of the State or political subdivision in which the business operates. Additionally, for such enterprises to violate federal law, there must be five or more persons involved in the conduct, and the business must either operate continuously for more than thirty (30) days or receive more than $2,000 in revenue in a single day. The statute also provides a definition of “gambling,” encompassing, but not limited to, pool-selling, bookmaking, slot machines, dice tables, lotteries, bolita or numbers of games, and selling chances.
Federal law also prohibits gambling activities separate from direct participation in the operation of a gambling enterprise. 18 U.S.C. §1084 outlaws the transmission of wagering information. Under the statute, it is unlawful to knowingly use a wire communication facility to transmit, in interstate or foreign commerce, bets, wagers, or other information assisting in the placing of a bet, or any transmission entitling the recipient to money as the result of a bet or wager. Such offenses are punishable by up to two years imprisonment. Notably, §1084 does not prevent the further prosecution of offenders under any State laws.
18 U.S.C §1082, in contrast, addresses the illegal operations of gambling ships. The section defines the prohibitions of the chapter, making it unlawful for any United States citizen or resident to set up, operate, own, or hold any interest in a gambling ship. Further, individuals cannot conduct any gambling activities in the pursuance of operating a gambling establishment on a gambling ship. Offenders face up to two years imprisonment and fines under the title and can additionally be required to forfeit the vessel to the United States.
The Eleventh Circuit affirmed a gambling conviction under §1955 in United States v. Masino, No. 18-15019, 2021 WL 3235301 (11th Cir. July 30, 2021). In Masino, the defendants were the majority owners of a bingo parlor. The case arose from Florida, where local law does not categorically prohibit the operation of bingo parlors, but instead subjects them to certain conditions. Failure to comply with Florida’s conditions creates liability under §1955. Noncharitable organizations, such as the parlor run by the defendants, are not allowed to generate profits and must return all profits to players as prizes, whereas charitable organizations may generate profits for use towards charitable purposes. The defendants’ parlor leased space to charitable organizations to operate their own bingo sessions, but provided paid employees, and the defendants averaged a 17% net income on the bingo revenue—marginally less than the portion of the income allocated to the charities themselves. Over a ten-year period, the defendants received distributions exceeding $5,000,000 in bingo proceeds. The Court found that the defendants themselves were not part of a charitable organization, and were therefore violating Florida law, and §1955 by extension, by conducting bingo for profit.
These three statutes, through their direction towards different facets of gambling, provide a comprehensive federal statutory scheme to address illegal gambling activities. The statutes defer to State law, operating in tandem with existing State statutory schemes. In Alabama, this deference is particularly notable, as the state is notoriously strict regarding gambling.
If you have a Federal Criminal case, a State Criminal case, a Municipal Case or a Family Law case in the Northern District of Alabama, Middle District of Alabama, Southern District of Alabama, or any federal jurisdiction in the Eleventh Circuit, including Alabama, Florida, and Georgia, contact Joe Ingram or Ingram Law LLC at (205) 335-2640. Get Relief * Get Results.