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Electronic Gambling Report: State Civil And Criminal Cases

New York:

In October 1998, the New York State Attorney General' s office brought civil charges against Casino International, an Antigua-based Internet gaming company, for several violations of state gaming laws. This action was taken pursuant to New York state law forbidding all forms of gambling except the state lottery.

The Attorney General' s office alleged that Casino International maintained an illegal Internet gaming site in the United States through two Internet Service Providers (ISP) based in Long Island, New York. The gaming company failed to respond to the state' s charges, and in May 1999, a default judgment was issued.

According to the Attorney General' s office, Casino International distributes its gaming website through ISPs in every U.S. state. Although the company claims to be licensed by the Antiguan government, the Free Trade Zone Commission, which is the official licensing body, does not support this claim.

According to the Attorney General' s office, the settlement did not hold the New York ISPs responsible for the alleged violation. The Attorney General' s office likened the ISP' s position to that of an express mail service that unknowingly delivered illegal drugs; as part of the injunctive relief in the case, the New York ISPs were simply forbidden to continue the practice.

New York also brought a civil case in 1998 against World Interactive Gaming Corporation, an Internet casino operator and a subsidiary of Florida-based Atlantic International Entertainment, for fraudulent solicitation of stock investments and for violation of several federal and state gambling laws based on operation of an Internet casino. That case is pending.

Wisconsin:

In September 1997, the State of Wisconsin filed suit against three Internet gaming operations: Net Bet, Online International, Inc., and the Coeur d' Alene Indian lottery. Net Bet, based in Nevada, operated Casinos of the South Pacific in the Cook Islands, whose website advertisement said that only residents of Nevada, Minnesota, New Jersey, and the Cook Islands were prohibited from placing legal bets.

In May 1998, the Net Bet defendants agreed to include Wisconsin in their list of prohibiting jurisdictions and to cease sending betting information into Wisconsin. Online International, Inc., a Wisconsin-based corporation, planned to operate an Internet gaming website from a location in that state to supply Internet gaming to jurisdictions outside the United States.

In late 1998, the corporation was ordered by the court to dissolve. In the third case, that of the Coeur d' Alene Indian lottery, the court held that the tribe was immune from suit but that Wisconsin does have jurisdiction over Unistar, the company engaged by the tribe to run its Internet lottery. Unistar was alleged to have advertised gaming on a website aimed at Wisconsin residents (an action that the tribe could not authorize outside its reservation), misrepresenting the legality of gambling in the state.

In May 1999, after the tribe and Unistar had shut down their lottery following a separate court ruling in Idaho, they agreed not to offer the lottery to Wisconsin residents until they had obtained a specific ruling on its legality from a court in Wisconsin.

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