As a U.S. citizen living in the U.S., is it legal to have ownership in
a internet gambling website, if the primary operations are off-shore,
in a country such as Isle of Man or Costa Rica?  NOTE:  A U.S. citizen
named Jay Cohen was arrested for apparantly the same a few years ago,
in relation to his operation of a company called World Sports
Entertainment.

<Online Internet Gambling Website Ownership.

I am not a member of the legal profession so I would strongly suggest
that you consult a lawyer before investing in an offshore gambling
site.

Since internet gambling is a relatively new phenomenon, there have not
been many cases brought in the courts to test the law.

The case against Jay Cohen was for violations of the Wire Act. In
order to not fall foul to this law, it would be necessary to ensure
that no customers of the website were US residents.

However the Wire Act only covers sports betting so it could be argued
that casino betting is not covered. To date this argument has not been
tested in court.

Federal Wire Wager Act.
[58] Subsection (a) of the Wire Act, a criminal provision, provides:
Whoever being engaged in the business of betting or wagering knowingly
uses a wire communication facility for the transmission in interstate
or foreign commerce of bets or wagers or information assisting in the
placing of bets or wagers on any sporting event or contest, or for the
transmission of a wire communication which entitles the recipient to
receive money or credit as a result of bets or wagers, or for
information assisting in the placing of bets or wagers, shall be fined
under this title or imprisoned not more than two years, or both.[59]
http://www.gambling-law-us.com/Federal-Laws/wire-act.htm

This site explains how the law applied in the case of Jay Cohen.
(Source: Phone and Internet Use as Basis for Wire Act Violations. By
Chuck Humphrey.)
http://www.gambling-law-us.com/Articles-Notes/Internet-Wire-Act.htm 

Since the case of Jay Cohen, the World Trade Organisation has ruled
that US laws banning cross-border gambling break international trade
rules. On March 27, 2003, Antigua and Barbuda requested formal
consultations with the United States and the World Trade Organisation
concerning the US ban on cross-border gambling and betting services
industry.

On March 24, 2004, the World Trade Organization (WTO) ruled that US
federal law banning Internet gambling violated the US's international
trade obligations. The US government has appealed against this ruling
and a verdict is expected in the spring of 2005.
(Source: The Trade of Cross-Border Gambling and Betting: The WTO
Dispute Between Antigua and the United States.)
http://216.239.59.104/search?q=cache:tA25TDqCUy0J:www.law.duke.edu/journals/dltr/articles/PDF/2004DLTR0013.pdf++wto+us+gambling+%22wire+act%22&hl=en

The American Society of International Law looks at the case in detail.
http://www.asil.org/insights/2004/11/insight041117.html

Full transcripts of the complaint can be found here ? see Gambling and
betting, US, cross-border supply (GATS) ? Brought by Antigua and
Barbuda DS285. Click on DS285 for an index to all documents.
http://www.wto.org/english/tratop_e/dispu_e/dispu_subjects_index_e.htm#gambling_betting>


<Search strategy:>

<"jay cohen">
<://www.google.com/search?hl=en&lr=&q=%22jay+cohen%22>

<"jay cohen" wto us gambling>
<://www.google.com/search?hl=en&lr=&rls=GGLD%2CGGLD%3A2004-31%2CGGLD%3Aen&q=%22jay+cohen%22+wto+us+gambling>


<Hope this helps.>

---

Request for Answer Clarification by pocboston-ga on 06 Mar 2005 06:56 PST

Thank you for your answer.  I have only one follow-up question - in
the websites you examined in your searches, which one or two do you
think would be best for me to check back to regularly for updates
regarding the appeals verdict from the WTO (expected in this Spring)? 
Thanks

---

Clarification of Answer by belindalevez-ga on 06 Mar 2005 08:51 PST

<The World Trace Organisation site is probably the best as they will
be the source of the verdict.
http://www.wto.org/english/tratop_e/dispu_e/dispu_subjects_index_e.htm#gambling_betting

They have a news page here.
http://www.wto.org/english/news_e/news_e.htm

You can also register to receive WTO news by email.
http://icd.wto.org/Forms/LogonPage.aspB7=7376D660C58311d0A3A500C04FD706EC&Lang=En>

<Hope this helps.>