As architect of the 2006-07 portion of the NBA betting scandal involving referee Tim Donaghy, pro gambler Jimmy Battista pleaded guilty in July 2008 to conspiracy to transmit wagering information across state lines. Technically speaking, Battista was in violation of 18 U.S.C. Sec. 371 (Conspiracy to commit offense) and of 18 U.S.C. Sec 1084 (Transmission of wagering information), the latter of which explicitly states the following:
The offenses to which Battista pleaded are commonly charged in gambling cases, and are generally understood. However, as readers of Gaming the Game will notice, Battista's bets - and those of heavyweight sports bettors - were placed predominantly offshore. U.S. law regarding offshore betting from within the U.S. is still evolving, as are the related law enforcement responses. Interested parties may therefore wish to consult the following as primers: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.
18 U.S.C. (Gambling)
31 U.S.C. § 5361 - 5367 (Prohibition of Funding of Unlawful Internet Gambling)
Defines "bets and wagers" for purposes of this Act to include bets for contests, sporting events, games predominantly subject to chance, and lotteries. Excludes from such definition: (1) activities governed by securities laws: (2) transactions under the Commodity Exchange Act; (3) over-the-counter derivative instruments; (4) contracts of indemnity or guarantee; (5) any contract for insurance; (6) any deposit or other transaction with an insured depository institution; and (7) reward programs or games conducted by businesses for promotional purposes.
Declares that nothing in this Act may be construed to prohibit any activity allowed under the Interstate Horseracing Act, to preempt any state law prohibiting gambling, or to affect the application of the Indian Gaming Regulatory Act.
Expresses the sense of Congress that this Act does not address the legality of certain horse racing activities under federal law.
Amends the federal criminal code to prohibit persons engaged in the business of betting or wagering from knowingly accepting credit, or the proceeds of credit, electronic fund transfers, checks, drafts, or similar financial instruments or the proceeds of any other financial transaction in connection with unlawful Internet gambling (this prohibition is defined by this Act as a "restricted transaction"). Imposes a fine and/or prison term of up to five years for violations.
Directs the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to prescribe regulations to identify and block restricted transactions. Grants immunity from civil liability for blocking a restricted transaction or one which is reasonably believed to be a restricted transaction.
Grants U.S. district courts original and exclusive jurisdiction to prevent and restrain restricted transactions and to enter a permanent injunction against individuals convicted of accepting financial instruments for unlawful Internet gambling. Authorizes the Attorney General or any state attorney general to institute proceedings to prevent or restrain a restricted transaction.
(Sec. 803) Calls upon the U.S. government, in deliberations with foreign governments, to: (1) encourage cooperation by foreign governments in identifying whether Internet gambling operations are being used for money laundering, corruption, or other crimes; (2) advance policies that promote international cooperation in enforcing this Act; and (3) encourage the Financial Action Task Force on Money Laundering to study the extent to which Internet gambling operations are being used for money laundering purposes.
Directs the Secretary of the Treasury to report to Congress annually on deliberations between the United States and other countries on Internet gambling.
A tidy summary of internet gaming law can be found here.
Lastly, an invaluable resource for anyone attempting to understand gambling law and its enforcement is David G. Schwartz's, Cutting the Wire: Gaming Prohibition and the Internet (Reno, NV: University of Nevada Press, 2005). Schwartz, who graciously assisted me during the research for Gaming the Game, is the Director of the Center for Gaming Research at the University of Nevada, Las Vegas (UNLV).
