No grey areas under Louisiana law
By Stephen Seawright
(Filed: 08/09/2006)
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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>The Louisiana law under which Sportingbet chairman Peter Dicks has been arrested explicitly outlaws internet gambling in sharp contrast to national laws where online gambling is a legal grey area.
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The law on gambling by computer in Louisiana states: "Gambling which occurs via the internet embodies the very activity that the legislature seeks to prevent."
The statute under which Mr Dicks was arrested in New York early yesterday morning targets internet gambling much more directly than the law used to charge David Carruthers, the former chief executive of BetonSports who was detained in Texas six weeks ago.
The Louisiana law also states: "The legislature further recognises that it has an obligation and responsibility to protect its citizens and in particular its youngest citizens from the pervasive nature of gambling which can occur via the internet."
People convicted of running a computer gambling operation face a maximum sentence of five years in jail "with or without hard labour" and a $20,000 fine, according to the Louisiana law.
Each American state has its own laws and Louisiana's statutes would not apply in other states. Louisiana's online gaming act is one of the few such state laws in the US. However, every gambling executive will now be wary of setting foot anywhere in the US for fear of being arrested under the Louisiana law.
This morning the Sportingbet finance director, Andrew McIver, who becomes chief executive in October, said he would not travel to the US until the charges are resolved, warning that Louisiana law is "incredibly wide ranging".
By contrast Mr Carruthers was arrested under the Federal Wire Act, a nationwide law which was introduced in 1961 to prevent bookmakers from taking bets over the phone from punters in states where it was illegal to gamble. One of the main reasons the law was drawn up was to prevent money laundering by the mafia.
Drawn up decades before the worldwide web and the concept of online poker, it remains a grey area whether internet casinos are outlawed under the Wire Act. Some claim the law only covers sports betting and not other forms of gambling such as poker.
Others argue that, as the Act was drafted in 1961, it was intended to cover fixed-line telephone betting, meaning it is also ambiguous as to whether it should cover the internet.
Prosecutors in Mr Carruthers case alleged that BetonSports was linked to a company where employees had previously been convicted of collecting bets in Florida and placing them in Costa Rica via toll-free telephone and internet links.
In an unrelated case federal prosecutors indicted Jay Cohen in 1998 for operating a sports betting web site that violated the Wire Act. In 2000 he was sentenced to 21 months in prison. However, Dresdner Kleinwort analyst Andrew Lee said yesterday: "Jay Cohen was banged up for telephone betting."
By Stephen Seawright
(Filed: 08/09/2006)
<!--NO VIEW-->
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>The Louisiana law under which Sportingbet chairman Peter Dicks has been arrested explicitly outlaws internet gambling in sharp contrast to national laws where online gambling is a legal grey area.
</TD></TR></TBODY></TABLE>
The law on gambling by computer in Louisiana states: "Gambling which occurs via the internet embodies the very activity that the legislature seeks to prevent."
The statute under which Mr Dicks was arrested in New York early yesterday morning targets internet gambling much more directly than the law used to charge David Carruthers, the former chief executive of BetonSports who was detained in Texas six weeks ago.
The Louisiana law also states: "The legislature further recognises that it has an obligation and responsibility to protect its citizens and in particular its youngest citizens from the pervasive nature of gambling which can occur via the internet."
People convicted of running a computer gambling operation face a maximum sentence of five years in jail "with or without hard labour" and a $20,000 fine, according to the Louisiana law.
Each American state has its own laws and Louisiana's statutes would not apply in other states. Louisiana's online gaming act is one of the few such state laws in the US. However, every gambling executive will now be wary of setting foot anywhere in the US for fear of being arrested under the Louisiana law.
This morning the Sportingbet finance director, Andrew McIver, who becomes chief executive in October, said he would not travel to the US until the charges are resolved, warning that Louisiana law is "incredibly wide ranging".
By contrast Mr Carruthers was arrested under the Federal Wire Act, a nationwide law which was introduced in 1961 to prevent bookmakers from taking bets over the phone from punters in states where it was illegal to gamble. One of the main reasons the law was drawn up was to prevent money laundering by the mafia.
Drawn up decades before the worldwide web and the concept of online poker, it remains a grey area whether internet casinos are outlawed under the Wire Act. Some claim the law only covers sports betting and not other forms of gambling such as poker.
Others argue that, as the Act was drafted in 1961, it was intended to cover fixed-line telephone betting, meaning it is also ambiguous as to whether it should cover the internet.
Prosecutors in Mr Carruthers case alleged that BetonSports was linked to a company where employees had previously been convicted of collecting bets in Florida and placing them in Costa Rica via toll-free telephone and internet links.
In an unrelated case federal prosecutors indicted Jay Cohen in 1998 for operating a sports betting web site that violated the Wire Act. In 2000 he was sentenced to 21 months in prison. However, Dresdner Kleinwort analyst Andrew Lee said yesterday: "Jay Cohen was banged up for telephone betting."
