I gather that my argument about the unconstitutionality of the Internet Gambling Enforcement Act (which Tom Bell has nicely dubbed the UnInGen-ious Act")is not passing the Volokh Conspiracy hoo-ha test ... Sigh.
But here's another thought. The law, oddly enough, does not make it unlawful to engage in gambling over the Internet. (Of course, it's not really so odd -- if Congress actually passed such a law, and they started fining or throwing in jail individuals who use the Internet to gamble,they'd have a lot of very, very pissed off constituents on their hands.)
Instead, it prohibits anyone "engaged in the business of betting or wagering" from knowingly accepting payment "in connection with the participation of another person in unlawful Internet gambling." (§ 5363). And it requires the Federal Reserve to promulgate regulations requiring banks, credit-card companies, and other financial institutions to "identify and block or otherwise prevent or prohibit restricted transactions," i.e. those involving "unlawful Internet gambling."
But -- and this is the interesting part -- the Act doesn't itself make any Internet gambling "unlawful." It defines "unlawful Internet gambling" as "knowingly transmitting a bet or wager" using the Internet "where such bet or wager is unlawful under any applicable Federal or State law."
In other words, the act of placing the bet has to be unlawful under some other Federal or State law for it to be covered by this Act.
No provision of Federal law, at present, makes it unlawful to place a wager at an Internet gambling site. So what gives this statute teeth are the provisions of State law that do so. NOTICE TO STATE LEGISLATURES: Would you like to have about $20 billion or so directed towards financial institutions in your State? It's easy! Here's what you do: Permit Internet gambling. Say that Vermont passes a law saying that it is legal to gamble over the Internet. I could then open up a bank account in Vermont; when the offshore gambling site gets my inquiry to set up an account, I can transfer money from my Vermont account -- not illegal! -- to the gambling site, and vice versa.