Actions By The US Government to Stop Online Gambling

Online gambling is a huge phenomenon worldwide, although there are few countries that have taken to it like the United States has. The U.S. is a perfect environment for online gambling, with its high level of affluence, its almost ubiquitous internet access, and its big appetite for gambling in general.

It is estimated by some that Americans wager over $400 billion on unregulated sports betting every year alone. This doesn’t even include online casino and online poker wagering, and although we don’t have the total figures on how much Americans bet online each year, it’s a very big number indeed.

So regardless of the Wire Act making it clearly illegal for businesses to offer online sports betting, they still do, and the Wire Act doesn’t apply at all to individual betters, nor could it, as gambling at a personal level is under the domain of individual states and not the federal government.

So the net effect is that while the government has been able to celebrate a few successes in looking to charge companies with offering internet gambling, most of this occurred several years ago. The industry is wiser now, and the government really hasn’t made much of a dent at all into the market, which continues to proliferate essentially unabated.

What little success that the government has had in looking to slow down online gambling has been their efforts to interfere with the payment processing end of the business, and they certainly have made things rather difficult for offshore operators, and some have not been up to the challenges. If the difficulties in payment processing cause excessive delays, players will just move elsewhere, and they have, but these days there’s no real problem with payment processing at the sites who have figured this out well.

The coming of Bitcoin will likely render all of this rather meaningless though, and as this payment method catches on more and more with U.S. online gamblers, this takes the whole experience completely off the grid, due to the very nature of Bitcoin, which is a user based currency and is also completely anonymous.

In recent times, the U.S, government really has seemed to get the fact that online gambling is here to stay, and there’s really nothing they can do about it, other than the occasional harassment they have been more than willing to engage in. Even that has pretty much abated these days, and there’s only been a few instances of this in the past anyway.

Some Past Attempts To Charge People With Promoting Online Gambling

The first instance of someone being charged with promoting online gambling occurred in the state of Missouri in 1997, with Michael Simone being charged. Online gambling was in its infancy and people back then actually tried to operate online gambling sites out of the United States. Missouri actually tried to extradite Simone from Pennsylvania, and he ended up paying a fine to resolve the case.

The federal government’s first indictment on online gambling charges occurred in 1998 with Jay Cohen of the World Sports Exchange being charged with violating the Wire Act. From the Simone case, Americans learned that it wasn’t a good idea to operate online gambling sites from the U.S. With the Cohen case, they learned that operating one offshore while residing in the United States wasn’t a good idea either.

Cohen ended up being convicted and sentenced to 21 months imprisonment. Cohen appealed the case all the way to the U.S. Supreme court, who refused to hear the case, and he ended up serving time. The World Sports Exchange continued to operate out of Antigua until 2013, when it went under due to poor business conditions.

In 1999, a case was brought against World Interactive Gaming Corp from operating or offering online gambling in the state of New York. While this did not lead to anything, it established the claim by prosecutors at least that placing online bets in a state does constitute gambling in that state.

In 2000, Paradise Casino and its two owners were charged and convicted of offering online sports betting in violation of the Wire Act, in addition to money laundering and tax evasion charges. They plead guilty and agreed to forfeit a million dollar condo and a Lamborghini as their punishment.

In 2001, Gold Medal Sports and several people connected with them became charged under Federal law. It seems that not all Americans had learned the lesson of not becoming involved in sports betting while residing in the U.S., and a number of people were convicted here, with both fines and jail time imposed.

It’s Not Always Enough To Be An American In Another Country

The case of Ronald Sacco, the founder of Betcris, added further reason for Americans indicted on gambling charges to be cautious. Sacco was indicted in 2000, and was living in Costa Rica at the time, in spite of Costa Rica having deported him back to the U.S. a few years earlier. He got sent back again, and once back in the U.S., the jig was up and he was sent back to prison.

In 2005, William Scott and Jessica Davis of BetWWTS were charged under the Wire Act and the Travel Act, as well as on money laundering charges and failure to disclose foreign bank accounts.

In 2006, BetonSports founder Gary Kaplan was indicted on 20 charges, including Wire Act violations as well as tax evasion. He ended up reaching a plea deal in 2009 where in exchange for a reduced sentence of 4 years.

Things have calmed down a lot since, although Americans now tend to proceed more cautiously, especially when it comes to returning to the U.S., even for a visit, or visiting the Dominican Republic, which have been eager to detain and return Americans who have been charged with crimes in their own country and returning them to the U.S..

These are all cases of Americans being charged, although the US government has even indicted foreign persons for online gambling violations, including PokerStars founder Isai Scheinberg, who is Israeli by birth and was living in Canada at the time of the charges.

As for players, no action has ever been taken at either the federal or the state level for online gambling, regardless of whether it is, isn’t, or may be illegal to gamble online in a given state.