Justice Department defends using 'dated' laws in gambling arrests

14 September 2006

THE REGISTER
www.theregister.co.uk
High Wire Act
By OUT-LAW.com
Published Thursday 14th September 2006 19:04 GMT

The US Department of Justice has admitted that the 1961 Wire Act which it uses to prosecute executives of online gambling companies is “dated”. The Department insists, though, that the law is sufficient for the prosecution of gambling executives.

Referring to the laws under which it prosecutes, including the controversial 1961 Act, Justice Department spokeswoman Jacqueline Lesch told OUT-LAW: “They include language about a wire communication facility which we believe includes the internet. They are dated but they cover online gambling.”
Sun Microsystems

Two UK businessmen have been arrested in the US in recent weeks in connection with internet gambling. Betonsports chief executive David Carruthers and Sportingbet chairman Peter Dicks were arrested at US airports when they landed. Carruthers’s case is being handled by the DoJ, while Dicks may be prosecuted under state laws by the state of Louisiana.

The latest edition of OUT-LAW Radio looks into the confused legal status of online gambling in the US. “It is certainly very confused because they are relying on statutes that date back to the 1960s and you have the added complication of states interpreting them in different ways,” said John Hagan, a lawyer at gambling law specialist firm Harris Hagan. “Certainly I’m confused and no doubt the online gambling operators are equally confused and when you’re talking about the risk of criminal penalties and being arrested in transit through the states it’s not a very satisfactory state of affairs.”

“We don’t think it is confusing,” the Justice Department’s Lesch said. “We think it contravenes three statutes, the Wire Act, the Travel Act and the Illegal Gambling Businesses Act. This has long been a concern of the DoJ.”

Many legal observers question the use of the 1961 Act to prosecute individuals for using technology and services that were not invented when the Act was written. “They are certainly taking a very strong view of outdated legislation and applying an interpretation for their own purposes,” said Hagan.

A new law which would outlaw all internet gambling has passed through the House of Representatives in the US but has not yet passed through the Senate. Most observers believe that it will not be passed. “The chances of it actually passing through the Senate are quite low,” said Wayne Brown, an analyst at Altium Securities who follows online gambling firms. “The same bill has in various other forms been tried to pass over the last few years.”

The DoJ spokeswoman said that it intended to continue prosecuting under existing laws. “When the evidence allows, we will continue,” she said.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

THIS ARTICLE CAN BE FOUND AT THE REGISTER

Related News

  • 23 June 2009

    Betonsport's Founder to face Trial

    It’s been awhile, but you should remember this situation very well, especially if you live in America. Gary Kaplan, the founder of the online sportsbook Betonsports,  and 10 other defendants were indicted 3 years ago in St. Louis for accepting sports wagers over the Internet and via phone, which was in direct violation of the age-old USA wire act which prohibits such activities.

    Read full article
  • 07 October 2006

    INTERNET GAMBLING LEGISLATION CREATES MORE QUESTIONS THAN ANSWERS

    IN BUSINESS Las Vegas By Liz Benston / Staff Writer Days after the contentious passage last weekend of a bill to block American financial institutions from processing online gambling transactions, observers have mixed feelings about what the legislation means for players who gamble at home and the related industries that benefit from the action.

    Read full article
  • 29 April 2009

    Minnesota jumps on the bandwagon to block Internet gambling sites

    Instead of using Kentucky’s approach of trying to actually seize gambling related domain names, Minnesota is using the 1961 wire act to force ISP’s (Internet Service Providers) to block access to gambling related websites and casinos at the network level. This is fine, and all, but again, we’re still talking about censorship, which is totally against our 1st Amendment rights that guarantees Americans Freedom of Speech.

    Read full article