A US Federal Appeals Court has upheld what is understood to be the first conviction of a defendant charged with illegally running an offshore sports betting operation on the Internet.
Jay Cohen, owner of World Sports Exchange, was convicted last August and sentenced to 21 months in prison with a $5000 fine but since that time he has remained on bail pending the decision of the Appeals Court. The prosecution against Cohen was brought under the anti-gambling provisions of the federal Wire Wager Act which stipulates that it is illegal for entities in either interstate or foreign commerce to use telephone lines to place bets on sporting activities. Furthermore, broadcasting information that assists gamblers to place bets is also illegal.
The Manhattan Federal jury found Cohen guilty of illegally processing bets on sporting events placed by Americans over the Internet as well as on the telephone. Cohen began his offshore e-business in 1996 and it was recorded that World Sports Exchange received over 60,000 phone calls from US clients over the following two years.
Advised by West Coast legal consultants, Cohen and other defendants had supposed they could escape the clutches of US law by operating from jurisdictions where gambling is legal such as Curacao, Panama, the Dominican Republic, Costa Rica and, most recently, Antigua. It also came to light that Cohen had tried to attract punters through the web site, www.sex.com, where he had placed betting and sporting advertisements.
The US Congress is currently discussing ways of preventing online gambling from flourishing. Rep. Robert Goodlatte, R-Va., has announced that he plans to re-introduce legislation that was blocked by the House of Representatives last year. And Rep. John LaFalce, D-NY, presented a bill last week to prohibit gamblers and gambling operations from using banks' credits and checks to transact payments or collect winnings.
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