USA Prosecutors Escalate War on Payment Processors of Online Casinos

The US Department of Justice has stepped up its attack on the online casino and sportsbook industry while easing off from peer-to-peer poker operators. Over the past two years prosecutors have primarily filed charges against companies engaged in internet gambling related financial transaction.

Only a few federal districts in the United States have pursued internet gaming charges at all, with the primary location being the Southern District of New York.

The three main American gambling laws used by federal prosecutors are The Illegal Gambling Business Act (IGBA), Money Laundering Laws, and The Wire Act.

A close examination of the types of charges filed against the groups and persons charged over the past years reveals multiple charges which indicates that the money transfer businesses were not in compliance with basic banking and money-transmitting laws. Online sportsbooks and casinos must ensure that each processor used is a legitimate enterprise prior to the start of any business relationship.

Department of Justice has come to believe that civil forfeiture proceeding against online peer-to-peer poker operators is no longer feasible due to the multiple attempts at both state and federal level to regulate peer-to-peer online poker sites in United States.

The people and organization which are currently at risk of forfeiture and prosecution are those involved in (a) operating internet gambling websites, (b) transferring profits of gambling activities, (c) advertisers.

All but one of the dozen or so prosecutorial cases involving online gambling was settled before trial, the one trial of an online sportsbook resulted in a conviction. The defendants are always confronted with the possibility of spending the remainder of their natural life in a maximum security federal prison if convicted by a jury.

The prosecution gives them the option of pleading guilty to a reduced charge and agreeing to forfeit all profits from gambling activities. So far all, but one defendant 11 years ago, has accepted the prosecution’s offer.