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Kevin Smith

New Jersey Puts the Heat on Eight More Sites

19 October 2001

New Jersey Attorney General John J. Farmer Jr. has targeted the online gaming industry once again, this time hitting eight operations, including some of the industry's biggest players, with civil actions for violating the state's law by accepting wagers from Garden State residents. The lawsuits were filed Tuesday in the state's superior court.

The defendants named in the suits are,,,,,, and

"We will not allow these sites that permit minors to gamble with impunity to continue to flourish."
-Mark Herr, Division of Consumer Affairs

Most of the eight defendants were unavailable for comment, although a spokesperson from, which recently bought (another defendant), said that the U.K.-based firm hadn't received word yet of the case and isn't too worried about it.

"We haven't gotten any correspondence on this at all," Leanne Trenton said. "Certainly we are seeking clarification as to what has gone on. Sportingbet believes that their stated policies are in place to comply with market legislation and they haven't violated any issues. Especially considering that they are regulated under British law."

The timing of the complaints has caught the ire of some in the industry considering the current state of affairs in New Jersey. Frank Catania, former director of the New Jersey Division of Gaming Enforcement (DGE) and now head of Catania Consulting Group, Inc., said that state's justice department should be concentrating its efforts on the two confirmed cases of anthrax that have been traced back to the Trenton post office.

"It really is terrible with all this anthrax stuff going around that the Attorney General is worried about gambling on the Internet," he said. " and and the others in this round . . . are major, big-time companies. These aren't exactly companies that have given the industry a black eye."

"We are placing the operators of these sites on notice that if they accept wagers from New Jersey citizens, they are breaking the law and we will go after them."
-Attorney General John Farmer

Farmer, meanwhile, contends that the suits are needed to protect New Jersey residents from illegal sports book sites. He said residents are able to place bets on professional and college sporting events via the Internet or telephone.

According to a statement released by Farmer's office, during a joint investigation by the Division of Gaming Enforcement and the Division of Consumer Affairs, state investigators were able to log onto the eight Web sites, sign up for service and place wagers on athletic events taking place all across the country.

Allowing individuals from New Jersey, including underage gamblers, to wager at their sites violates the New Jersey Constitution as well as New Jersey's civil and criminal statutes.

John Peter Suarez, the current director of the DGE didn't return messages left at his office Friday by IGN, but he did send a warning out to New Jersey residents in a statement.

"The citizens of New Jersey need to be aware that these sports betting operations are not regulated and they are illegal," he said. "Regardless of their occasional claims of 'licensing' and 'legality,' they answer to no one and are therefore not held to the same scrutiny as our Atlantic City casinos."

In his statement Farmer reiterated his opinion that online gambling of any kind is illegal in the U.S.

"On both the state and federal level, sports book activity remains illegal and it is my department's responsibility to investigate such activity and enforce the law," he said.

State officials claim the main drive behind the investigation was the ease in which minors were able to gamble online.

"As our joint investigation revealed, there are very few, if any, safeguards in place to prohibit a minor with access to a credit card from logging on," Division of Consumer Affairs Director Mark Herr said. "We will not allow these sites that permit minors to gamble with impunity to continue to flourish."

The complaints, which were filed in the Mercer County Superior Court, Chancery Division, ask the court to enjoin the defendants from accepting wagers from individuals or entities located in New Jersey. The state also seeks an accounting of all money won from New Jersey residents in the past 12 months and asks that the defendants restore any money or property acquired by means of an alleged unlawful practice.

In addition to filing the court papers, Suarez said the state is also targeting companies indirectly involved with the betting.

"We have written cease and desist letters to the telephone companies that provide toll-free services to these illegal Internet sites," he said. "Under federal law, the telephone companies will be required to comply with our demand."

Farmer said the second round of complaints is another loud warning to online gaming operators who do business in New Jersey.

"We are placing the operators of these sites on notice that if they accept wagers from New Jersey citizens, they are breaking the law and we will go after them," he said.

But Catania doesn't see it that way. He feels the attack on the interactive gaming sector is politically charged. Farmer's term will be up in four months and Catania thinks the attorney general is using the issue as rallying cry for the future.

Gaming law expert Tony Cabot pointed out that the possibility of any of the named sites ever showing up in court is highly unlikely.

"The chances of getting someone in court that runs a company entirely outside of the U.S. is slim," he said.

The eight lawsuits mark the second round of civil complaints filed in New Jersey against Internet gambling sites. In June the Division of Gaming Enforcement and Consumer Affairs filed civil actions against, and

More than four months after the filing of those suits, Catania said none of the defendants named had been served papers by the AG's office.

New Jersey Puts the Heat on Eight More Sites is republished from
Kevin Smith
Kevin Smith