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Electronic Gambling Report: Survey Of State Legislation

29 November 2000

Nov. 29, 2000 --Early in 1999, FinCEN sent a survey to the offices of the attorneys general of all the states and United States territories and the Office of the Corporation Council of the District of Columbia. The survey posed three questions related to the jurisdictions' policy toward Internet gaming:

• whether the jurisdiction has statutes or regulations dealing with gaming in general and, if so, whether any of them might apply to Internet gaming;

• whether any existing or future statutes of the jurisdiction apply specifically to Inter-net gaming;

• whether the jurisdiction had pursued any criminal or civil actions pertaining to Internet gaming.

Responses were received from 19 states, the District of Columbia, and Guam. 25 Responses to the question of applicability of current laws or regulations to Internet gaming overwhelmingly expressed the opinion that laws designed for conventional gambling could be interpreted to apply to Internet gaming, depending on the circumstances of a particular case.

The criterion most often cited is legal establishment that Internet gaming actually occurs within the boundaries of the state in which the gambler is physically located. Although no responding jurisdiction cited a law or regulation specifically enacted to address Internet gaming, one section of the Nevada Gaming Control Act lists the Internet as a "medium of communication," giving the State

Gaming Control Board official jurisdiction over Internet gaming.

In New Jersey, an article of the state constitution says that any new form of gaming must be approved by referendum before being legalized. Therefore, according to the spokesperson for the state attorney general' s office, the current interpretation of that article makes Internet gaming illegal.

Ohio' s interpretation is that any form of gambling that is illegal by state law in conventional form also is a violation of state law when it is disseminated in the state via a computer system.

The Alabama Attorney General' s office interprets the definition of gambling devices in the state code—" any device, machine, paraphernalia, or equipment that is normally used or usable in the playing phases of any gambling activity" —as including Internet equipment. The interpretation implicitly includes the Internet under the state laws prohibiting conventional forms of gambling.

Alabama has taken no criminal or civil action against Internet gaming, but the decision in a 1999 criminal case, brought for possession of obscene material for transmission via the Inter-net, rejected the defense that the relevant law preceded the development of the Internet and therefore was not applicable.

In Arizona and Tennessee, the authority to prosecute such cases rests with local and district prosecutors, respectively, rather than the state' s attorney general.

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