U.S. gambling and the law: Important milestones 2000 – 2004

2000

Jay Cohen and World Sports Exchange

U.S. authorities sentenced Jay Cohen to 21 months in prison and a $5,000 fine. (He only served one year of the prison time.) Jay Cohen’s World Sports Exchange was based in Antigua, but accepted U.S. gamblers. Cohen was arrested when he returned to the U.S.

2002

1961 Wire Act

The U.S. 5th Circuit Court of Appeals rules that the 1961 Wire Act applies to gambling on sporting events and contests, not to gambling in general.

2003

WTO

AntiguaThe nation of Antigua challenge the U.S ban on gambling ads in the World Trade Organization court. According to Antigua, the ban is in violation of free trade agreements. In November 2004, Antigua wins the case. The U.S. appeals. In April 2005, the WTO court once again rules in favor of Antigua.

In April 2006, the U.S. ignores the deadline for complying with the WTO ruling in the case of Antigua vs USA. In March 2007, WTO rules (again) that the U.S. is not in compliance with WTO rules.

The United States now has three valid options:

  • Be WTO compliant.
  • Pay compensations to the complaining parties (chiefly Antigua and the EU).
  • Give concessions to the complaining parties (chiefly Antigua and the EU).

The U.S. choses the third option. The administration of President George W. Bush refuses to disclose the details of those concessions.

DoJ sends C&D letter

The U.S. Department of Justice sends a letter to the National Association of Broadcasters, and so tome major media outlets, warning them that accepting adds for online gambling could be illegal. The recipients stopped accepting ads for online gambling. The Sporting News didn’t stop accepting adds until six months after receiving the letter, and in 2006 they were fined $7.2 million for this. A settlement was reached were The Sporting News paid $4.2 million in cash, and the rest of the fine in the form of public service adds against online gambling.

Online gambler is fined $500 for violation of state law

U.S. resident Jeffrey Trauman is sentenced to pay a $500 fine for having engaged in sports betting online. This is not a federal case; it concerns North Dakota state law against gambling. The fine is rather small considering the $100,000 Trauman is estimated to have won on sports betting.

2004

InternationalNetCasino.com

The webmaster of (affiliate) portal InternationalNetCasino.com is sentenced for accepting money from would-be gamblers and helping them to place bets. The sentence consists of the 8 days he’d already been in jail, 90 days of community service and $1,330 in fines.

CasinoCity.com

CasinoCity.com sues the U.S. Department of Justice to establish its right to publish internet gambling advertising. A judge dismisses the case, since CasinoCity.com has not received one of the Cease & Desist letters sent out by the U.S. Department of Justice. CasinoCity.com files an appeal. In 2006, CasinoCity.com withdraw their appeal before it can be heard, saying that they have already made their point and that they are willing to fight if they ever get charged for publishing internet gambling advertising.