Where can I find reliable information on the legality of participating
in an internet-based gambling site as an American citizen from a
computer in America?  I expect that it is not legal if the site is
operated within America.  How would one validate the claims of a
offshore gambling site that purports to be legal for American-based
participation?

Hi, 

Gambling on-line in the US is about as against the law as it can get
right now and several companies have found this out. There is
currently movement to have ISP's use their DNS servers to block access
to users on their systems to known gambling websites. This has not
been completed but is in the works.

Paypal was recently sued by the state of New York, and settled for
allowing their service to be used to make payments to Internet
gambling websites.

PayPal to pay fine over online gambling Mountain View firm agrees to
block gaming payments
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/08/22/BU60063.DTL&type=business

Betonsports $20 million NY ad campaign. 
http://www.onlinecasinonews.com/ocn/article/article.asp?id=2253

While New York city is the most active right now, there are moves from
captitol hill which will drive this enforcement of the law across the
rest of the nation.

AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R.
3215http://www.techlawjournal.com/cong107/gambling/20020613hr3215.asp

Blow the Whistle on Internet Gambling
http://www.ncaa.org/news/2002/20020415/editorial/3908n39.html

Citibank Promises To Block Online Gambling Credit Card Charges, While
House Judiciary Committee Pursues Legislative Restrictions
http://www.adlawbyrequest.com/regulators/Netgaming022402.shtml

Thanks for the question and if you need further citations or articles
there are plenty out there to find.

webadept-ga

The law at this point appears to be murky, and so far Congress has
refused to make the law clearer.  The following article gives a good
overview.
http://www.gamblingandthelaw.com/internet_gambling.html

from what i have heard on various computer magazines, it is not legal
for an american citizen to gamble online to an offshore gambling place
or an illegal onshore gambling site (state run lotteries are probably
the only legal ones). You probably won't get in trouble for placing
bets, but it is illegal under the same rules that make placing bets
via telephone illegal.