Gambling on the Internet

Gambling is a great example of the problems the internet causes the legal profession.

Normally, gambling in the United States is regulated by each state. These state laws vary widely, but few were written with internet gabling in mind.

There is one important federal law on gambling. It prohibits gambling using the telephone system. To be in violation of this law, you must do two things.

First, the defendant must be engaged in the business of betting or wagering. This element has been held to reach professional gamblers, whose activities are within the scope of the proscribed conduct.
Second, information assisting in the placing of bets and wagers must be transmitted by means of a "wire communication facility.

But, what is a "wire transfer facility". In applying this provision, federal courts have uniformly construed this term to mean the telephone, though no court has ever held that "wire communication facility" was limited to telephonic communications. In fact, 18 U.S.C. 1081 defines "wire communication facility" broadly to mean "any and all instrumentalities, personnel, and services (among other things, the receipt, forwarding, or delivery of communications) used or useful in the transmission of writings, signs, pictures, and sounds of all kinds by aid of wire, cable, or other like connection between the points of origin and reception of such transmission."

To get around this law and several state laws, companies have set up web sites in foreign nations (like the Dominican Republic and Costa Rica) where internet gambling is legal. They make their web pages in English, and seem to target an American audience (by offering wagers on American sports, for instance). They are American citizen.

Question: Is this Legal?