Internet Gambling | Virtual Gambling Resource
Internet Sports Betting Advertiser Convicted
The can of worms may just have been opened in the United States regarding
the advertising of internet sportsbooks, casinos, and poker rooms.
Surprisingly, the case has nothing to do with the United States Department of
Justice and the letters they like to send to companies which accept money for
advertising internet gambling. Instead it all has to do with the Garden State,
New Jersey. In October of 2005 Nicholas Drakos was arrested and accused of
promoting internet sports betting through his website International Net Casino.
The case was heard in Morristown, New Jersey before Judge Salem Vincent Ahto.
It all started in January 2004 when an undercover officer contacted
Drakos to set up an online betting account. The two had met in person in order
to discuss the online account as well as Drakos affiliate program. Affiliate
programs are extremely common in the internet gambling arena in terms of
advertising. They give website owners the opportunity to make more money by
giving a commission incentive for recruiting other bettors. Drakos was very
honest and straightforward about his organization and how they make money. There
was no reason for him not to be. He was under the impression that internet
gambling was legal.
Drakos had been advertising internet sports betting on his website as
he thought it was legal in New Jersey, or at least he thought it wasn't illegal.
New Jersey does not have a law which specifically bans internet betting. As
such, Drakos tried to use this logic to have the charges dismissed last October,
stating that he hadn't committed a crime as there is no law stating that it
internet betting is a crime. According to Drakos defense lawyer Gerard Hanlon
"He was so open with what he did. It is not a crime that offends the sense of
morality."
Melanie Smith, the Morris County Assistant Prosecutor respond to this claim
by signifying that under state law, a person is guilty of promoting gambling
when he or she knowingly engages in conduct that "...materially aids any form of
gambling activity." Furthermore she added that amendments to New Jersey's
constitution have legalized certain types of gambling in New Jersey and
prohibited the Legislature from authorizing other forms of gambling "...unless
the specific kind, restrictions and control ... are approved by public
referendum." This argument swayed the decision in her favor.
The real clincher in the prosecutions favor was the details. Smith had
contended that Drakos was the host of a gambling Web site that featured his
picture and phone numbers for customer assistance. The phone numbers for
assistance is a violation as is hosting a gambling website in the United States.
These two things are clearly illegal under the 1961 Wire Act. This is why all
internet gambling sites are off-shore. It isn't even legal for internet gambling
sites to have an office in the US. Thus, when police became aware of the Web
site, they claimed that the site was "...the functional equivalent of a wire
room, or a location where bettors could call or log on to and place bets." The
site also had connections outside the United States.
In the end Judge Ahto handed down his final decision. Drakos was
convicted and sentenced to 90 days on a manual labour program and three years'
probation for promoting gambling through a Web site he hosted to attract wagers
on college and professional sports. I have to wonder if he would have received
the same sentencing if he hosted a website advertising just internet casinos and
poker rooms. Sports betting, especially promoting college betting which is
frowned on in the US, is more taboo than regular gambling. Ahto pointed out that
New Jersey has certain approved forms of gambling that include casinos,
state-run lotteries and certain types of raffles and bingo games that benefit
civic and specified organizations. He added that under the state constitution
internet sports betting is not a sanctioned activity under current state law.
Note that land-based sports' betting is not stated as legal in the state of New
Jersey.
Drakos had changed his plea to guilty after Judge Ahto accepted the
prosecution's argument that internet sports betting is illegal even though the
state Legislature has not specifically banned it. As such, the recent
proceedings where simply for sentencing. Judge Ahto felt that as Drakos was up
front regarding the website he hosted and most people don't realize that
internet sports betting is illegal he would be relatively easy on Drakos
regarding sentencing. Judge Ahto stated " I don't think Mr. Drakos was trying to
hide what he was doing. It's not like this was a clandestine operation." To this
Judge Ahto added that he had wished a higher court in New Jersey would have the
opportunity to review the legitimacy of internet sports books, casinos, and
poker rooms. However, most likely this will not happen as Drakos' lawyers did
not appeal Ahto's trial court finding.
Judge Ahtos has a strange definition of light sentencing for something
someone did out of misunderstanding. Drakos has been sentenced to the eight days
he already served in the Morris County jail after his arrest. In addition Judge
Ahtos has imposed on Drakos 90 days on the Sheriff's Labor Assistance Program, a
work-in-lieu-of-jail program. Drakos also must serve three years' probation and
pay approximately $1,330 in fines. Granted, he got work instead of jail time,
but 90 days still seems like a harsh penalty to me. Does he get paid for this 90
days worth of work?
Had Drakos simply hosted a web portal that allowed advertising of various
internet gambling sites, did not allow his face to be posted on the site,
and did not have a phone number for customer assistance he may not have been in
violation? There are many web portals hosted in the United States which
advertise internet sports books, casinos, and poker rooms. It will be
interesting to see if more advertising portal owners end up arrested and
prosecuted for this victim-free crime.
Posted on: March 6, 2006
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