Internet Gambling 

1.    Federal Legislation Related to Internet Gambling

On April 29, 2003, Deputy Assistant Attorney General John G. Malcolm testified before the U.S. House of Representatives Subcommittee on Crime, Terrorism, and Homeland Security Committee on the Judiciary. In his testimony, Mr. Malcolm offered the views of the Department of Justice about Internet gambling, including the potential for gambling by minors and compulsive gamblers, the potential for fraud and money laundering, and the potential for infiltration by organized crime. Mr. Malcom's testimony addressed the Department's concerns, with respect to H.R. 1223, about the feasibility and desirability of regulating Internet gambling. He expressed several of the Department's concerns with respect to H.R. 21, including the concern that this bill should be drafted to apply to all unlawful Internet gambling regardless of the communications medium used to place bets.

Deputy Assistant Attorney General John G. Malcolm's Testimony before the U.S. House of Representatives Subcommittee on Crime, Terrorism, and Homeland Security (April 29, 2003) Kevin V. Di Gregory, Deputy Assistant Attorney General, testified before the House of Representatives Committee on Banking and Financial Services on June 20, 2000 on Gambling on the Internet.  As with earlier testimony, this statement addressed the Department of Justice's concerns with proposed Internet gambling legislation and the problems inherent in creating a solution that is not technology-neutral.

Statement of Kevin V. Di Gregory, Deputy Assistant Attorney General Criminal Division Before the Committee on Banking and Financial Services of the United States House of Representatives Concerning Gambling on the Internet (June 20, 2000) Kevin V. Di Gregory, Deputy Assistant Attorney General, testified before the Subcommittee on Crime, of the House Committee on the Judiciary on March 9, 2000 on Internet Gambling.  His testimony addressed the Department of Justice’s concerns with proposed Internet gambling legislation that would effectively expand legal gambling.  He also expressed the Department’s concern with creating an inconsistent regulatory scheme that would result in the same conduct being treated differently over the telephone, the Internet, and other technologies.

Testimony of Kevin V. Di Gregory, Deputy Assistant Attorney General, addressing Internet Gambling before the Subcommittee on Crime, of the House Committee on the Judiciary (March 9, 2000) Kevin V. Di Gregory, Deputy Assistant Attorney General, Department of Justice, testified before the Senate Committee on Indian Affairs on June 9, 1999 regarding Internet Gambling and Indian Gaming.  His testimony addressed two issues: (1) the Department of Justice's support of efforts to amend federal gambling statutes to ensure that these gambling activities made possible by the Internet are prohibited; and (2) the Department's belief that any law prohibiting Internet gambling should not conflict with the rights or privileges of Indian tribes, both as sovereigns and under the Indian Gaming Regulatory Act (IGRA).  Also linked below is a letter from the Department of Justice to Senator Patrick J. Leahy, Ranking Minority Member, Senate Judiciary Committee, regarding the Internet Gambling Prohibition Act of 1999.

Testimony of Kevin V. Di Gregory, Deputy Assistant Attorney General, addressing Internet Gambling and Indian Gaming before the Senate Committee on Indian Affairs (June 9, 1999) 

Testimony of Kevin V. Di Gregory, Deputy Assistant Attorney General, addressing Gambling on the Internet before the Subcommittee on Crime, of the House Committee on the Judiciary (June 24, 1998)      

Questions and answers: 

Prosecution of Internet Gambling

On February 28, 2000, Jay Cohen was convicted in Manhattan federal court of operating a sports betting business that illegally accepted bets and wagers on sporting events from Americans over the Internet and telephones.  Cohen is the first defendant to stand trial in a series of  Internet offshore sports gambling cases that were the first prosecutions brought under the federal Wire Wager Act.

Jay Cohen Convicted of Operating an Off-Shore Sports Betting Business that Accepted Bets from Americans Over the Internet (February 28, 2000) In New York, twenty-one owners, managers and employees of Internet sports betting companies have been charged in Manhattan federal court with conspiracy to transmit bets and wagers on sporting events via the Internet and telephones. Information about the filing of these charges is available below.

Owners, Managers and Employees of Internet Sports Betting Companies Charged with Violating Federal Law  3.    Gambling Against Enforcement—Internet Sports Books and the Wire Wager Act, Joseph V. DeMarco, USA Bulletin (March 2001)

Even as a certain "Madness" crowds network airwaves during the month of March, and as Americans gamble in various forms in ever-increasing numbers, gambling on sporting events is strictly regulated and, in most cases, prohibited outright under federal and state law. Notwithstanding these general prohibitions, however, the exponential growth in the use of the Internet by the mass public has been accompanied by a corresponding growth in the creation of Internet websites which offer Americans the ability to gamble on-line without the need for a neighborhood bookie. From on-line private lotteries, to on-line card games, "quiz shows," and traditional sports books, these websites offer privacy and anonymity to both the owners of the sites and their "clients" while, paradoxically, offering a perceived aura of legitimacy that derives from the fact that anyone can "sign on" to and use them as freely as any legitimate e-commerce site.

Additional information on this subject is available via the link below.

Gambling Against Enforcement—Internet Sports Books and the Wire

Wager Act, Joseph V. DeMarco, USA Bulletin (March 2001)