Internet gambling operators have not been bashful about promoting themselves as a purportedly legal way to circumvent traditional gambling restrictions. Those claims, however, clash with the broad reach of the federal antigambling authority and the number of times such legislation has withstood constitutional challenge. It was not surprising, therefore, that in the spring of 1998, the United States Attorney for the Southern District of New York announced the filing of criminal complaints against twenty-one offshore Internet-gambling operators under the Wire Wager Act. These prosecutions are the federal government's first effort to attack the proliferation of online gambling.
The complaints alleged that these offshore sports gambling sites, with names such as "Real Casino," "Galaxy Sports," and "Winner's Way," had advertised in sports and airline in-flight magazines touting the ease and convenience of betting via the Internet and listing their Web site addresses. Interestingly, although all the Web sites purportedly were operated in the Caribbean or Costa Rica under licenses issued by the host country, the complaints indicate that several entities run by the defendants had offices in the United States.
Other United States contacts included toll-free telephone numbers over which undercover FBI agents received gambling information and could place bets, as well as wire transfers of money from the United States to offshore banks. Additionally, some of the sites used the U.S. mails to send informational brochures to American customers. There were further contacts via e-mail and wire transfers of refunds back to the United States. All of these communications are alleged to have violated the prohibitions of [sections] 1084. (Adam Thierer, Clyde Wayne Crews Jr, 2003)
In early March 1998, warrants were issued for the arrest of fourteen gambling operators, eleven of whom surrendered or were arrested. A few weeks later, warrants were issued for the arrest of seven additional........
