subject: Online gambling legal issues in US [print this page] Online gambling legal issues in US Online gambling legal issues in US
The United States Court of Appeals for the Fifth Circuit ruled in November 2002 that the Federal Wire Act states that information for sports betting across telecommunications lines is prohibited through electronic transmission but affirmed a lower court ruling that the Wire Act "'in plain language' does not prohibit Internet gambling on a game of chance."
Specific laws against online gambling of any kind exist in some states. Also, in case of lacking proper licensing, owning an online gaming operation would be illegal, and no online gaming licenses are currently granted by states.
In August 2004, an online portal for Internet gambling sites called "Casino City", sued the U.S. Department of Justice. The complaint alleged, inter alia, that the website's businesspromoting Internet gamblingwas legal, and requested a declaration from the court that its business was protected by the First Amendment. The case was dismissed by the U.S. District Court for the Middle District of Louisiana in February 2005.
In its opinion, the District Court wrote:
It is well-established that the right to advertise illegal activity is not protected by the first amendment... the advertising of illegal activity, namely Internet gambling specifically directs the government's interest... Furthermore, because it falsely portrays the image that Internet gambling is legal, the speech in which the plaintiff wishes to engage is misleading... It does not fall within the speech that is protected by the First Amendment because plaintiff's speech concerns misleading information and illegal activities,
Casino City's appeal in January, 2006 was dismissed by the U.S. Court of Appeals, 5th Circuit.
In February 2005 a bill to legalize and regulate online poker and online poker cardroom operators has been passed by the North Dakota House of Representatives in the state. Testifying before the State Senate, if the bill became law, Nigel Payne CEO of Paradise Poker pledged to relocate to the state. However, in March 2005, the measure was defeated by the State Senate. Rep. Jim Kasper, who sponsored the 2005 legislation, plans to introduce similar bills in the 2007 North Dakota legislative session.
In July 2006, while changing planes on his way from London to Costa Rica, David Carruthers the CEO of BetonSports, a company publicly traded on the London Stock Exchange was detained in Texas. He and ten other individuals had been previously charged in a sealed indictment with violations of US federal laws relating to illegal gambling. While as noted above, non-sports betting was stated a United States Appeals court not to be a subject of Wire Act, the Supreme Court of the United States previously refused to hear an appeal of the conviction of Jay Cohen, where lower courts held that the to own a sports betting operation that offers such betting to United States citizens is made illegal by Wire Act.
Violations of at least nine different federal statutes were alleged by The BetOnSports indictment, including 18 USC Sec. 1953. Carruthers is currently under house arrest on a one million dollar bail bond.
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