Friday, September 15, 2006

The US Department of Justice has admitted that the 1961 Wire Act which it
uses to prosecute executives of online gambling companies is "dated". The
Department insists, though, that the law is sufficient for the prosecution
of gambling executives.Referring to the laws under which it prosecutes,
including the controversial 1961 Act, Justice Department spokeswoman
Jacqueline Lesch told OUT-LAW: "They include language about a wire
communication facility which we believe includes the internet. They are
dated but they cover online gambling."Two UK businessmen have been arrested
in the US in recent weeks in connection with internet gambling. Betonsports
chief executive David Carruthers and Sportingbet chairman Peter Dicks were
arrested at US airports when they landed. Carruthers's case is being handled
by the DoJ, while Dicks may be prosecuted under state laws by the state of
Louisiana.The latest edition of OUT-LAW Radio looks into the confused legal
status of online gambling in the US. "It is certainly very confused because
they are relying on statutes that date back to the 1960s and you have the
added complication of states interpreting them in different ways," said John
Hagan, a lawyer at gambling law specialist firm Harris Hagan. "Certainly I'm
confused and no doubt the online gambling operators are equally confused and
when you're talking about the risk of criminal penalties and being arrested
in transit through the states it's not a very satisfactory state of
affairs."

"We don't think it is confusing," the Justice Department's Lesch said. "We
think it contravenes three statutes, the Wire Act, the Travel Act and the
Illegal Gambling Businesses Act. This has long been a concern of the DoJ."

Many legal observers question the use of the 1961 Act to prosecute
individuals for using technology and services that were not invented when
the Act was written. "They are certainly taking a very strong view of
outdated legislation and applying an interpretation for their own purposes,"
said Hagan.

A new law which would outlaw all internet gambling has passed through the
House of Representatives in the US but has not yet passed through the
Senate. Most observers believe that it will not be passed. "The chances of
it actually passing through the Senate are quite low," said Wayne Brown, an
analyst at Altium Securities who follows online gambling firms. "The same
bill has in various other forms been tried to pass over the last few years."

The DoJ spokeswoman said that it intended to continue prosecuting under
existing laws. "When the evidence allows, we will continue," she said.