26 U.S.C. § 4404. Territorial extent

The tax imposed by this subchapter shall apply only to wagers

1. (1)
   (1)accepted in the United States, or
2. (2)
   (2)

   placed by a person who is in the United States

   1. (A)
      (2)(A)with a person who is a citizen or resident of the United States, or
   2. (B)
      (2)(B)in a wagering pool or lottery conducted by a person who is a citizen or resident of the United States.