Is Not A Crime; Is It Legal?
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
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
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
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
WSEX.com 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