Gambling is stupid but voluntary,
criminalizing it is evil. The US
needs to get slapped upside its head.
Thursday August 10 2:49 AM ET
Man Jailed in 1st U.S. Online
Gambling Conviction
By Gail Appleson, Law Correspondent
NEW YORK (Reuters) - The first person to be
convicted on federal charges of running an illegal
offshore Internet sports gambling operation was
sentenced to nearly two years in prison.
Jay Cohen, co-owner of World Sports Exchange, based on the
Caribbean island of Antigua, was sentenced to 21 months in prison and
fined $5,000 by U.S. District Judge Thomas Griesa.
A Manhattan federal jury in February found Cohen guilty of operating a
sports betting business that illegally accepted bets and wagers on
sporting events from Americans over the Internet and telephones.
Cohen, originally from Long Island, New York, lives in San Francisco.
He was the first defendant to stand trial in a series of Internet offshore
sports gambling cases brought under the federal Wire Wager Act.
Under that law, it is illegal to use telephone lines in interstate or foreign
commerce to place sports bets. The act also outlaws the transmission of
information that helps gamblers bet on sporting events and contests.
Manhattan U.S. Attorney Mary Jo White said the case showed that
sportsbook operators who take bets from Americans could not avoid
the federal wager law by taking their business overseas.
``An Internet communication is no different than a telephone call for
purpose of liability under the Wire Wager Act,'' she said. ``As this case
demonstrates, persons convicted of operating Internet sportsbooks
offshore face very serious consequences -- imprisonment and
thousands of dollars in fines.''
Prosecutors alleged Cohen and other defendants tried to skirt U.S. law
by running their operations from jurisdictions that allow gambling, such
as Curacao, Panama, the Dominican Republic, Antigua and Costa Rica.
According to evidence presented at the two-week trial, Cohen's
company solicited Americans through the Internet site www.sex.com
and through a toll-free telephone number.
Prosecutors said Cohen's business also advertised in U.S. newspapers
and magazines. The ads said U.S. customers could open a betting
account with the company, wire money to fund the account and then
bet on U.S. sporting events and contests.
Prosecutors said undercover FBI agents accessed the Internet sites and
found information about betting on professional and college sporting
events such as basketball, hockey, baseball and football.
The undercover agents then opened accounts by transferring money via
Western Union. They placed wagers on the games from computers and
telephones in New York.
Cohen and 21 other defendants were indicted in 1998 for their alleged
involvement in offshore sports betting operations. Ten of the
defendants previously pleaded guilty to conspiring to break the wager
law.
Three have pleaded guilty to related misdemeanor counts and seven
remain fugitives, including Steve Schillinger, vice president and
director of wagering for World Sports Exchange.
Schillinger told Reuters late last year that the company does not believe
that what it is doing is illegal and that the federal government does not
have jurisdiction over the offshore business.
He said the operation took annual bets of between $100 million and
$200 million.
