Cutting The Wire: Gaming Prohibition And The Internet

7. March Madness

199 7฀ March฀Madness How฀the฀most฀famous฀application฀of฀the฀Wire฀Act฀sent฀an฀Internet฀gaming฀ operator฀to฀jail฀and฀sparked฀an฀international฀trade฀dispute. But฀the฀fact฀is,฀Judge,฀that฀if฀ever฀there฀was฀a฀case฀that฀is฀outside฀the฀heartland฀of฀cases฀that฀are฀ normally฀prosecuted฀as฀1084฀violations,฀this฀is฀the฀case.฀That฀statute฀has฀been฀used฀repeatedly฀ to฀prosecute฀bookie฀operations,฀a฀back฀wire฀room฀with฀no฀law฀firms,฀no฀accounting฀firms,฀no฀ advertising฀ firms,฀ nothing฀ off-shore,฀ everything฀ happening฀ inside฀ the฀ United฀ States฀ where฀ everybody฀in฀place฀recognized฀full฀well฀that฀they฀were฀involved฀in฀an฀illegal฀gambling฀operation. ฀฀—฀฀Benjamin฀Brafman,฀Sentencing฀Hearing,฀United฀States฀v.฀Jay฀Cohen฀(2000) there will probably always be some tension in the United States between the policing imperative to curtail some citizens’ actions in the name of law and order and those citizens’ wishes to pursue their pleasures unmolested . The growth of the Internet, a communications medium that slashes through national borders, has only complicated the collision between law enforcement and personal privacy. Because of the supranational nature of the Internet, simple issues of gaming law enforcement have become international legal disputes. To date, the U.S. government has chosen to criminalize online gaming, attempting to use the Wire Act to bind the digital beast. But the inherent slipperiness of the Internet has rendered meaningless the fight to subdue online gaming operators and “protect” American citizens from gambling online. As soon as prosecutors succeed in tying down one tentacle of the Internet octopus, it seems, another is free to deal digital blackjack to paying customers. From an enforcement perspective, it is an opponent even more elusive than Robert Kennedy’s hated boss gamblers and their syndicates. As national boundaries become progressively more porous, attempts to effect a national prohibition on online gaming by enforcing the Wire Act against foreign operators may prove futile. United฀States฀v.฀Jay฀Cohen Although Congress could not pass a bill to ban Internet gaming, law enforcement officials found they did have a few tools to use against Web casinos and betting sites. Although the most striking prosecutions of Internet gambling 07.indd 1 6/7/05 12:03:10 AM 200 cutting฀the฀wire operators came with a spate of federal prosecutions in March 1998 involving violations of the Wire Act, state attorneys general used other laws to strike at Internet gaming as well. Missouri attorney general Jeremiah W. “Jay” Nixon took one of the first legal stabs at Internet gaming providers. He was already inclined to challenge gaming outside of the jurisdiction of state authority, since in 1996 he had sued the federal government to guarantee that Missouri could fight any attempt by Indian tribes to acquire state land for gambling purposes.1 When the Coeur d’Alene tribe of Idaho began offering an online lottery, as Class II gaming, under the assumption that it was permitted to do so, Nixon sued the tribe. The Missouri attorney general argued that since the tribe was offering gambling to Missouri citizens, the laws of that state applied. Although a U.S. district court judge ruled that tribal sovereignty prevented Nixon from prosecuting the Indian tribe, the Eighth Circuit Court of Appeals ruled in Nixon’s favor, granting a temporary restraining order to stop the Coeur d’Alene tribe from offering online gaming.2 The ruling that bets placed in Missouri took place in Missouri, not on tribal lands, effectively derailed the tribe’s online lottery. Nixon also sought to protect the citizens of Missouri from Sports International , a Pennsylvania-based online sportsbook with a server in Grenada. NixonfiledacivilsuittopreventthesitefromacceptingwagersfromMissouri residents. After the site’s operator, Interactive Gaming and Communications Corporation, agreed to forgo bets from Missourians, a state investigator accessed the site and placed bets.3 Nixon then brought criminal proceedings against the head of Interactive, Michael Simone, charging Simone with promoting gambling in the first degree.4 Despite his attorney’s argument that Missouri lacked the jurisdiction to try him, Simone eventually pled guilty to the criminal charges and paid a fine of $25,000.5 Online gaming operators, it seemed, needed to keep themselves far from the wrath—and jurisdictional authority—of zealous attorneys general. Attorney General Nixon was not alone in prosecuting online gamblers. Other states, including Wisconsin, joined him in the fight against the Coeur d’Alene lottery site. Dennis Vacco, attorney general of New York, successfully fought to freeze the assets of World Interactive Gaming, which maintained a...