Friday, March 6, 1998

IT'S A LOSING BET

According to the New York Times, on March 4, Mary Jo White, US Attorney for Manhattan, announced the first federal prosecution of online sport's gambling. Her office charged 14 owners and managers of offshore companies with illegally using interstate phone lines to take online bets from Americans. Two defendants have been arrested by federal agents and the others have been contacted by the FBI to arrange their surrender. While some state and federal lawmakers have sought legislation explicitly banning online gambling, the federal law enforcement agencies have made clear that they feel online betting is already an illegal act. All of the defendants claim that their activities are legal.

"We're licensed to do what we do here by a sovereign government," said one defendant whose company operates out of Antigua.

While the companies are officially located outside the US, their owners and operators are all US citizens residing within the US. Many of the companies also maintain their business offices in this country even though they are supposedly based offshore.

Among the defendants are the operators of World Sports Exchange, Winner's Way, SDB Global, and Galaxy Sports.

White pointed out that instantaneous access to gambling on the Internet multiplies the risk of people losing large amounts of money without ever leaving home.

Prosecutors have not charged any bettors who used the Internet sites but hope that this action will serve as a warning that this method of gambling is illegal.

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