History of the 1998 Federal Government Charges Against Sports Betting Companies

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The United States government has long taken a position on sports betting that it is illegal under most conditions, and internet gambling on sporting events is almost always illegal. The specific law that the federal government relies on for this argument is the Wire Act, which was enacted in the 1960s to give the government a new tool to go after illegal bookies attempting to profit on horse races. But this law has come back to haunt various internet casinos, as well.

In 1998, the feds decided to target internet betting companies with a serious action against fourteen different people involved in internet sportsbooks. This particular action serves as one of the lower points in the history of both the American justice system and the trend towards liberalization of gambling laws around the world. In fact, this 1998 action was the first time that anyone had been arrested for being involved with internet casinos and sports bookmaking.

Four factors make this episode in history significant. First, the government only went after operators of sportsbooks and left all of the individual bettors alone. This is a positive sign for gamblers who are almost always not the target of federal or state actions when it comes to gambling, either online or through traditional means. The regulators always go after the operators of these companies that are taking the bets and ignore the people who are placing bets.

Second, the federal government only targeted Americans. Some were even living in the United States at the time the charges were filed. This made it much more likely that arrests could be made without having to come up with more charges that would lead to extradition of foreign nationals. The government may not have the ability to charge operators of sportsbooks who are citizens of other countries, but they are able to go after Americans no matter where they live.

Third, the government did not even charge the defendants with violations of the Wire Act itself. They were charged with conspiracy to violate the law which is a different matter entirely. This made it possible for the feds to be able to bring charges against the operators without having to prove that any bet was actually transmitted by wire. They only had to show that there was agreement to do so and that some overt act was taken.

Finally, the only type of betting that was mentioned in the case was betting on sporting events. Online poker, table games, lotteries, horse races, and all the other types of gambling that can be done were excluded. This is due to the fact that there is some question as to whether the Wire Act applies to all types of bets or just sports betting. The Department of Justice claims that all types of betting are prohibited by the Act, while other courts have found that only sports betting is prohibited. By only including sports gambling, the feds made it easier to prosecute.

So, what we can learn from these charges is that the government still looks very disfavorably upon internet gambling as a whole, but it is more interested in targeting American operators of sports betting websites and not interested in going after individual bettors. Also, the lawyers for the government have placed a lot of faith in the Wire Act to counteract internet gambling, but are still putting the safety of their charges ahead of all else by just having gone after sportsbooks. It seems that individual bettors are safe, as well as foreign online casinos, although even this may change in the future.

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