"So, Sky, how was Vegas?"
"Nat'an, Vegas was wonderful. The dice were my friends and the dolls had straight teeth and no last names."
For those who do not recognizing the above exchange, it emanates from Guys and Dolls, a classic Broadway show and, later, motion picture starring Marlon Brando as Sky Masterson, a jet set gambler, and Frank Sinatra as Nathan Detroit, a wannabe who operates what is reputedly the most dependable craps game in New York. Gambling—a staple of American culture.
Many of you readers are still catching your collective breath, having just returned from this year's Internext show in Las Vegas. The brightly lit palaces that line Las Vegas Boulevard South, just south of the city limits, are identifiable to virtually every adult in on Earth.
Do you believe the hypocrisy of all of this? People from every state go to Vegas to take a chance on the slot machines and the tables. Thirty or so states have their own casino gambling in addition to state lotteries in some form or another. And bingo has been a mainstay of church social activities as long as anyone can remember, although in most states it is otherwise illegal. Nevada bookies anticipate raking in nearly $100 million in legal bets every year on the Super Bowl—dwarfed by the perhaps billion-plus dollars bet illegally, ranging from $50 office pools to $5000 bets channeled through illegal bookies, with propositions ranging from which team will win the game and by how many points to which player will recover the first fumble.
Yet anti-gambling laws are exceptionally harsh across the nation. Take Texas, for example—home of three of the past eight presidents. The Texas statutory scheme of gambling regulations starts with the definition of "bet," since, after all, that is the illegal act that triggers all of the statutory mechanisms. Exclusions from the definition of "bet," for instance, include "contracts of indemnity or guaranty, or life, health, property, or accident insurance." Bet you didn't think of that! If you boil it down, life insurance is a wager with your insurance carrier: They are betting that you are going to live – and thereby will keep paying premiums – and you are betting that you are going to die—and your beneficiary collect the benefit. If not obvious enough, the difference is that the insurance policy involves an existing risk of your almost certain death and the resulting impoverishment of those dependent upon you, whereas a bet on whether the roulette wheel will land on the red or black is a risk that does not exist until after a bet is placed on it.
Next, there is the exception of what is not considered to be illegal gambling. The state lottery, of course, is an exception, but so is the Sunday afternoon poker game: "It is a defense…that: (1) [the] gambling [took place] in a private place; (2) no person received any economic benefit other than personal winnings; and (3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants." It has been suggested that one of the reasons that this exception was engrafted into the statutory scheme is the legendary craps games that were said to be so prevalent at gatherings of Texas sheriffs.
Beyond that, however, operating most kinds of gambling is a crime. Interestingly, Texas in 1993 reduced the punishment for bookies from a felony, as it had been for 20 years following the enactment of its revised penal code, to a misdemeanor—up to one year in jail, rather than up to 10 years in the "stony lonesome."
But the federal government has shown no such mercy. For starters, "any act…involving…gambling…which is chargeable under State law and punishable by imprisonment for more than one year" is a predicate to the federal RICO law, as is "any act which is indictable under any of the following provisions of title 18, United States Code…section 1084 (relating to the transmission of gambling information)." RICO, of course, gets you up to 20 years if there is a pattern of predicate acts, meaning two or more interrelated acts. No bookie in his right mind takes only one bet!
Section 1084, the so-called "Wire Act," was brought into being in the early 1960s:
"Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both."
The statute speaks for itself.
The Internet, of course, was a natural for gambling from the outset. A computer, after all, could easily be converted into a slot machine, a pari-mutuel ticket-selling window, or a race and sports book, especially when connected to the World Wide Web. For years, Congress has been buzzing about how to regulate Internet gambling, but nothing has come of it as of yet. Nevada has kicked around the idea of legalizing Internet gambling within its state borders.
But on the federal side, it is surprising that there have not been more prosecutions, given the teeth in the Wire Act and the prevalence of Internet gambling. At least one court has held that the Wire Act can be used to prosecute offshore, online bookies; but another court has held it inapplicable to casino-style, online gambling in United States v. Cohen, 260 F.3d 68 (2nd Cir. 2001); In re MasterCard Intern. Inc., Internet Gambling Litigation, 132 F.Supp.2d 468 (E.D. La. 2001), Af'd. 313 F.3d 257 (5th Cir. 2002). So, maybe they are waiting around for Congress to do something, given the American public's love-hate relationship with gambling; and the federal government has been steadily preoccupied with aiming its guns at sex, which is even more prevalent on the Internet. More details on this subject can be found at PokerLawyers.com.
Clyde DeWitt is a Los Angeles attorney whose practice has been focused on adult entertainment since 1980. He can be reached through AVN Online's offices or at [email protected]. Readers are considered a valuable source of court decisions, legal gossip, and information from around the country, all of which is received with interest. Books, pro and con, are encouraged to be submitted for review, but they will not be returned. This column does not constitute legal advice but instead serves to inform readers of legal news, developments in cases, and editorial comment about legal developments and trends. Readers who believe that anything reported in this column might impact them should contact their personal attorneys.
