Issue 128
February 24 - March 2, 2003
Volume 3
page 2

If Betting Is Not A Crime; Is It Legal?

By Professor I. Nelson Rose

In New York, it is not a crime to make a bet. But does that mean that betting in New York is legal?

This may sound like legal hair-splitting. But the U.S. Supreme Court recently refused to overturn a lower court's decision that betting does not have to be a crime to be illegal, resulting in a felony conviction for Jay Cohen, with a probable 21 months in prison. This legal technicality is also what is stopping companies like Caesars from opening up Internet casinos and taking bets from Americans.

Cohen was the president and co-founder of one of the most successful online sports betting operations, World Sports Exchange, licensed and run out of Antigua.

His problem was the federal Wire Act, which makes it a crime for anyone in the business of gambling to use a wire that crosses a state line to send information which would be helpful in the placing of bets.

But the Wire Act has a "safe harbor," an exception to protect legitimate news reporting of sports events and state-licensed race books.

The Wire Act was first proposed in 1961 as part of U.S. Attorney General Bobby Kennedy's War on Crime. It was designed to help states enforce their nearly unanimous prohibition on betting on sports events and races by telephone.

Because Nevada allows bets on horse races taking place in other states, there had to be a way for Nevada's racebooks to receive race results. So, the Wire Act expressly does not cover "the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal."

It has been settled law throughout almost all of the United States that a person cannot be punished for a specific activity, say betting on a sports event, unless a legislature has passed a statute making that activity a crime.

Betting with is legal in Antigua. Cohen's lawyers pointed out that the New York Legislature has never made it a crime to make a bet in New York. This, they said, made it legal on both ends.

The trial court and Court of Appeals disagreed. They sided with the prosecutors and declared that gambling is illegal in New York, even though it is not a crime. They

pointed to language in the State Constitution "no... bookmaking, or any other kind of gambling [except lotteries and horse racing] shall hereafter be authorized or allowed;" and the General Obligations Law, "All wagers, bets or stakes ...shall be unlawful."

In fact, many off-track betting parlors in the state have had account wagering for years, exactly like Bettors deposit money in advance with the OTB and then call when they want to bet on a horse race. New York law expressly allows bettors in other states to make phone bets to New York OTBs.

Until December, 2000, federal law did not make an exception for state-licensed OTBs. Yet, the feds only went after Cohen.

Which proves that the definition of "legal" sometimes depends more on who you are than on what you are doing.

New Grosvenor Casino Opens in UK - UNITED KINGDOM - A casino complex opens in Huddersfield, England on Feb. 21, 203. The Grosvenor casino can hold 385 people and includes a bar, restaurant, car parking, a card room, 10 slot machines and innovative gambling games, such as electronic roulette as well as traditional games such as roulette, blackjack and poker. It will also feature Super Stud Poker, a national jackpot game linking the Huddersfield casino with 31 other Grosvenor casinos UK-wide and offering the prospect of winning a pot totaling hundreds of thousands of pounds.

Montana Bill Would Allow Expanded Gambling - MONTANA – A bill will be introduced at the Legislature soon to authorize creation of a "music and entertainment district" to allow wide-open gambling at some proposed new major casinos in the national historic landmark district near
uptown Butte.

The key to the proposal is changing Montana's current limited gambling laws to accommodate the wide-open gambling, including slot machines, blackjack and possibly other games such as craps now banned in Montana, they are telling state officials. Project backers also would be looking to remove the current limits of 20 video gambling machines per establishment for the entertainment zone so they could install hundreds of machines and remove current limits on bets and winnings.

Montana gambling law allows some live games such as poker, keno and bingo. Current laws also allow up to 20 video poker and keno machines per establishment.

Under the promoters' plans, the wide-open gambling would be allowed only within the "music and entertainment district" in Butte, not in other Butte-Silver Bow establishments not in the zone nor in the rest of the state, sources said.

UAW-Daimler Chrysler 400 NASCAR Winston Cup Event
UAW-DaimlerChrysler 400 NASCAR Winston Cup

The UAW-Daimler Chrysler 400 NASCAR Winston Cup event will take place at the Las Vegas Motor Speedway on March 2, 2003.

Price: $58, $68, $88, $93, $108, $118

Price Note: NASCAR weekend packages are also available.

Show Time: 12:00 p.m.

Reservations: Reservations Recommended

For more information please call: (800) 644-4444
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