DOJ position on "Internet Gambling"
From CyberOne Wiki
November 20, 2002 U.S. Department of Justice Criminal Division Office of the Deputy Assistant Attorney General Washington, DC 20530
Statement of John G. Malcolm Deputy Assistant Attorney General
Criminal Division United States Department of Justice As was recently pointed out by the American Psychiatric Society: “Internet gambling, unlike many other types of gambling activity, is a solitary activity, which makes it even more dangerous: people can gamble uninterrupted and undetected for unlimited periods of time.” Indeed, the problems associated with pathological and problem gamblers, a frighteningly-large percentage of which are young people, are well-established and can be measured in the ruined lives of both the gamblers themselves and their families.
While the prosecution of individual bettors and intra-state gambling crimes are largely left to the individual states, there are numerous federal gambling statutes that the Department of Justice has employed against large-scale gambling businesses that operate interstate or internationally.
One such statute is the so-called Wire Act, which is codified at Section 1084 of Title 18 of the United States Code. This statute makes it a crime, punishable up to two years in prison, to knowingly transmit in interstate or foreign commerce bets on any sporting event or contest. It is the Department of Justice’s position that this prohibition applies to both sporting events and other forms of gambling, and that it also applies to those who send or receive bets in interstate or foreign commerce even if it is legal to place or receive such a bet in both the sending jurisdiction and the receiving jurisdiction. This view was upheld by the Second Circuit Court of Appeals in the recent successful federal prosecution of Jay Cohen, who was the President of World Sports Exchange, a company which was based in Antigua but which accepted bets via the telephone and the Internet from citizens in the United States.
Another federal statute that is applicable to on-line gambling is Section 1955 of Title 18, United States Code, which makes it a crime, punishable by up to five years in prison, to conduct, finance, manage, supervise, direct, or own all or part of a gambling business, so long as it is illegal to operate such a business under state law. In addition to criminal penalties, this section also contains a civil forfeiture provision, which the Department of Justice has used on occasion to great effect. For instance, the Department of Justice recently used this provision to forfeit nearly three-quarters of a million dollars that had been seized from a New Jersey corporation named Intercash Ltd. that served as an intermediary between U.S. gamblers and an English gambling house named American Sports Limited.1
Other statutes which the Department of Justice has employed against illegal on-line gambling operations would include the Racketeer Influenced and Corrupt Organizations Act (more commonly known by its acronym RICO), which can be found at Sections 1961-1968 of Title 18 of the United States Code, as well as Section 1952 of Title 18, United States Code, which is also referred to as the Travel Act, which makes it a crime to use interstate or foreign facilities in aid of unlawful activity, which includes gambling. There is also Section 1953, which prohibits the transmission of wagering paraphernalia, as well as other criminal and civil statutes that can be applied in this context.
