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Net gambling like off-track betting, lawyer argues
Lawmakers await appeals court ruling in Antiqua Internet betting operator's case
By TONY BATT
lasvegas.com GAMING WIRE
A man convicted last year of violating federal law for running an offshore Internet gambling operation was doing no more than what occurs daily at off-track betting parlors in New York, his lawyer told federal appeals judges this week.
If the conviction of Jay Cohen is upheld under the 1961 Wire Act, off-track betting could be declared illegal in New York and seven other states, Cohen lawyer Mark Baker told a three-judge panel of the 2nd U.S. Circuit Court of Appeals on Monday.
"In effect, it could criminalize every enterprise with access to Internet bets," Baker said.
U.S. Attorney Joseph DeMarco argued off-track betting, unlike Internet gambling, already is regulated. Off-track betting, DeMarco added, is governed by a different federal law, the Interstate Horse Racing Act of 1978.
"The defendant's argument that he modeled his business after off-track betting is an ignorance-of-the-law defense. It's irrelevant," DeMarco said.
Cohen was convicted on eight counts of bookmaking in February 2000 and drew a 21-month prison sentence last August.
Out on bail and now living in San Francisco where he has worked as a stock trader, Cohen attended Monday's appellate hearing. He watched with about 40 spectators, as his lawyer argued for the conviction to be thrown out by the trio of judges, who did not announce a timetable for issuing a decision.
"There is nothing to do now but wait," Cohen said after the 37-minute hearing. He donned a World Sports Exchange ball cap, which displayed the name of the company he founded in 1997 in Antigua with partner Steve Schillinger.
Other Web betting companies also have located on the Caribbean island, about 430 miles north of Venezuela, to escape the scrutiny of federal prosecutors, who view online betting as illegal.
Cohen handed a reporter a card listing himself as "former president and founder" of World Sports Exchange, which remains one of the most successful sports gambling sites online.
Cohen, Schillinger and 19 other online gambling operators were indicted in March 1998 for violating the federal wire act. The 33-year-old Cohen is the only one who has returned to the United States, stood trial and been convicted.
Cohen said he remains on good terms with Schillinger, who remains in Antigua, and talks to him weekly. But Cohen said he doubts he will return to World Sports Exchange.
"Right now, I am focused on this case, and I will take it to the (U.S.) Supreme Court if I have to," he said.
The Cohen appeal is being closely watched by Congress, where lawmakers are weighing whether to proceed with legislation to prohibit Internet gambling.
There are now more than 1,400 gambling sites on the Web, producing annual revenue of $1.6 billion worldwide, a figure that's expected to grow to $5 billion by 2003, according to the investment bank Bear, Stearns & Co.
Las Vegas casinos originally supported a bill by Sen. Jon Kyl, R-Ariz., to outlaw the practice, fearing the practice as a competitive threat. But casino executives view the Internet as a potentially lucrative market.
Lawmakers await appeals court ruling in Antiqua Internet betting operator's case
By TONY BATT
lasvegas.com GAMING WIRE
A man convicted last year of violating federal law for running an offshore Internet gambling operation was doing no more than what occurs daily at off-track betting parlors in New York, his lawyer told federal appeals judges this week.
If the conviction of Jay Cohen is upheld under the 1961 Wire Act, off-track betting could be declared illegal in New York and seven other states, Cohen lawyer Mark Baker told a three-judge panel of the 2nd U.S. Circuit Court of Appeals on Monday.
"In effect, it could criminalize every enterprise with access to Internet bets," Baker said.
U.S. Attorney Joseph DeMarco argued off-track betting, unlike Internet gambling, already is regulated. Off-track betting, DeMarco added, is governed by a different federal law, the Interstate Horse Racing Act of 1978.
"The defendant's argument that he modeled his business after off-track betting is an ignorance-of-the-law defense. It's irrelevant," DeMarco said.
Cohen was convicted on eight counts of bookmaking in February 2000 and drew a 21-month prison sentence last August.
Out on bail and now living in San Francisco where he has worked as a stock trader, Cohen attended Monday's appellate hearing. He watched with about 40 spectators, as his lawyer argued for the conviction to be thrown out by the trio of judges, who did not announce a timetable for issuing a decision.
"There is nothing to do now but wait," Cohen said after the 37-minute hearing. He donned a World Sports Exchange ball cap, which displayed the name of the company he founded in 1997 in Antigua with partner Steve Schillinger.
Other Web betting companies also have located on the Caribbean island, about 430 miles north of Venezuela, to escape the scrutiny of federal prosecutors, who view online betting as illegal.
Cohen handed a reporter a card listing himself as "former president and founder" of World Sports Exchange, which remains one of the most successful sports gambling sites online.
Cohen, Schillinger and 19 other online gambling operators were indicted in March 1998 for violating the federal wire act. The 33-year-old Cohen is the only one who has returned to the United States, stood trial and been convicted.
Cohen said he remains on good terms with Schillinger, who remains in Antigua, and talks to him weekly. But Cohen said he doubts he will return to World Sports Exchange.
"Right now, I am focused on this case, and I will take it to the (U.S.) Supreme Court if I have to," he said.
The Cohen appeal is being closely watched by Congress, where lawmakers are weighing whether to proceed with legislation to prohibit Internet gambling.
There are now more than 1,400 gambling sites on the Web, producing annual revenue of $1.6 billion worldwide, a figure that's expected to grow to $5 billion by 2003, according to the investment bank Bear, Stearns & Co.
Las Vegas casinos originally supported a bill by Sen. Jon Kyl, R-Ariz., to outlaw the practice, fearing the practice as a competitive threat. But casino executives view the Internet as a potentially lucrative market.