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Jay Cohen Treated Well by '60 Minutes'

"Betting on football is more an American pastime than the sport itself," reporter Morley Safer said in the introduction of the segment. "Almost $400 billion a year is bet on sports, most of it, perfectly illegal."

Then Safer said that Jay Cohen thought he had found a way around the law, by setting up a foreign corporation in Antigua. Cohen, Steve Schillinger and Haden Ware left their jobs at the Pacific Stock Exchange in San Francisco in 1996 to start World Sports Exchange.

During most of his "60 Minutes" appearance, Cohen was dressed in a conservative suit. Safer and his crew also traveled to Antigua to interview Schillinger and Ware, who were dressed like beach bums. (Safer to Schillinger: When was the last time you wore a tie, or socks? Schillinger: About four years ago, at the Exchange.)

After Cohen explained that most of World Sports Exchange's wagers were traditional bets against the point spread of a game, with football being the dominant sport, Safer said, "It's a lot more reliable than your local bookie and a lot cheaper than flying to Vegas," adding, "In Antigua, they're perfectly legal."

"I look at my job as being very similar to what some guy's doing right now at a day trader account," Ware told Safer, "allowing a customer to deposit money and take long shots by buying penny stocks. If you go to our Web site and change Boston Red Sox to Boston Market, we're Ameritrade, like that."

Safer seemed to agree: "It's just like the stock market, without the fancy address and the pretension." The cameras then showed pictures of World Sports Exchange's offices in a strip mall in Antigua, with operators taking wagers.

"They won't discuss numbers, but admit World Sports makes multi-millions, the largest of the nearly 1,000 Internet gambling sites which combined is projected to be a $10 billion industry," Safer stated.

Safer gave no attribution for his numbers, nor did he support his claim that World Sports Exchange is "the Internet's most popular and profitable online gambling site."

Considering that online gambling is largely unregulated and dominated by privately held, usually very secretive companies, one wonders how Safer could make such claims with such assurance.

And while there are projections that the industry could reach $10 billion, Safer didn't make it clear that such a number would be well into the future. Last summer, for example, Christiansen Capital Advisors estimated that Internet gambling would rise to $6.4 billion in 2003.

But the show was great press for Cohen and World Sports Exchange. Cohen's conviction last year on federal gambling charges was treated sympathetically by Safer, who said, "In sentencing him to 21 months in prison, the judge did recognize some of the weaknesses in the government's case."

The U.S. Attorney who prosecuted Cohen declined to be interviewed by "60 Minutes." The show used an old clip of Attorney General Janet Reno saying, "You can't go offshore and hide, you can't go online and hide."

Senator Jon Kyl, the Arizona Republican who has tried for years to get Congress to specifically ban Internet gambling, was interviewed, saying, "Under American law it is a violation of law regardless of where you are for American citizens to participate in this illegal activity."

Cohen told Safer that if Kyl was so worried about compulsive gambling, he should work to prohibit free drinks in casinos. And Cohen's lawyer, Ben Brafman, told Safer that state lotteries are "almost highway robbery," because the odds of winning are so slim.

"Brafman and others believe the Cohen case will probably ultimately be decided by the U.S. Supreme Court," Safer reported. He noted that if Cohen loses his appeal, Schillinger and Ware will never be able to return to the U.S.

"So what are these two poor little rich men to do?" Safer asked, while the CBS cameras showed Schillinger and Ware golfing in a gorgeous Antiguan setting. "They're like a couple of survivors of one of those castaway game shows, where they won every prize except the big one – a ticket home."

He said to Schillinger and Ware: "I suspect a lot of people watching would be quite envious of this kind of sublime exile that you're in?" Ware responded, "I have no complaints."

Schillinger admitted it would be nice to have the freedom to return to the U.S. But in the show's concluding line, he said, "If you're going to be trapped somewhere, it's not a bad place to be trapped."

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