DOJ Treats Foreign Online Casinos with US Clients As If in America

The US Department of Justice inadvertently clarified American government’s legal take on foreign based online casinos who accept financial transactions used to fund online poker sites in United States.

The 51 page legal paper submitted November 4 to New York Federal Court in conjunction with last April’s indictments of foreign based online poker businesses in the United States, banks, and gambling payment processors known as Black Friday.

Prosecutors argue that when an online gambling business accepts a bet from a US resident (on any game of chance, which includes poker in eyes of the prosecution), then that online gambling establishment is seen by the US government as ‘conducting business in (that) particular state’ where the US resident lives.

The DOJ somewhat unclearly explains that the US government created a distinct model for classification of online gambling ventures which are licensed and hosted outside the US.

If a foreign based online casino in United States accepts deposits from an American gambler, that transaction will be legally classified by US government as if physically conducted inside and (in accordance with/or while breaking) the laws of one of the fifty American states (the state where the gambler is located).

So in the eyes of the USA government, a Costa Rican, Gibraltar, or Maltese licensed online poker room or casino that accepts bets from a New Yorker, might as well just host its servers in New York City, since the current interpretation of the American gambling laws will treat the two transactions in the same manner under NY State Laws.

“The defendants are nonetheless incorrect on the law. Defendants do not point to a single case that supports their contention that ‘conducting’ business in a particular state requires more than allowing players in the state to place bets on a gambling website hosted elsewhere,” prosecutors retort to the defense claim that collecting bets is not enough to meet the legal benchmark to be considered ‘conducting a business’.