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The can of worms may just have been opened in the United States regarding the advertising of internet sportsbooks, casinos, and poker rooms. Surprisingly, the case has nothing to do with the United States Department of Justice and the letters they like to send to companies which accept money for advertising internet gambling. Instead it all has to do with the Garden State, New Jersey. In October of 2005 Nicholas Drakos was arrested and accused of promoting internet sports betting through his website International Net Casino. The case was heard in Morristown, New Jersey before Judge Salem Vincent Ahto. It all started in January 2004 when an undercover officer contacted Drakos to set up an online betting account. The two had met in person in order to discuss the online account as well as Drakos affiliate program. Affiliate programs are extremely common in the internet gambling arena in terms of advertising. They give website owners the opportunity to make more money by giving a commission incentive for recruiting other bettors. Drakos was very honest and straightforward about his organization and how they make money. There was no reason for him not to be. He was under the impression that internet gambling was legal. Drakos had been advertising internet sports betting on his website as he thought it was legal in New Jersey, or at least he thought it wasn't illegal. New Jersey does not have a law which specifically bans internet betting. As such, Drakos tried to use this logic to have the charges dismissed last October, stating that he hadn't committed a crime as there is no law stating that it internet betting is a crime. According to Drakos defense lawyer Gerard Hanlon "He was so open with what he did. It is not a crime that offends the sense of morality." Melanie Smith, the Morris County Assistant Prosecutor respond to this claim by signifying that under state law, a person is guilty of promoting gambling when he or she knowingly engages in conduct that "...materially aids any form of gambling activity." Furthermore she added that amendments to New Jersey's constitution have legalized certain types of gambling in New Jersey and prohibited the Legislature from authorizing other forms of gambling "...unless the specific kind, restrictions and control ... are approved by public referendum." This argument swayed the decision in her favor. The real clincher in the prosecutions favor was the details. Smith had contended that Drakos was the host of a gambling Web site that featured his picture and phone numbers for customer assistance. The phone numbers for assistance is a violation as is hosting a gambling website in the United States. These two things are clearly illegal under the 1961 Wire Act. This is why all internet gambling sites are off-shore. It isn't even legal for internet gambling sites to have an office in the US. Thus, when police became aware of the Web site, they claimed that the site was "...the functional equivalent of a wire room, or a location where bettors could call or log on to and place bets." The site also had connections outside the United States. In the end Judge Ahto handed down his final decision. Drakos was convicted and sentenced to 90 days on a manual labour program and three years' probation for promoting gambling through a Web site he hosted to attract wagers on college and professional sports. I have to wonder if he would have received the same sentencing if he hosted a website advertising just internet casinos and poker rooms. Sports betting, especially promoting college betting which is frowned on in the US, is more taboo than regular gambling. Ahto pointed out that New Jersey has certain approved forms of gambling that include casinos, state-run lotteries and certain types of raffles and bingo games that benefit civic and specified organizations. He added that under the state constitution internet sports betting is not a sanctioned activity under current state law. Note that land-based sports' betting is not stated as legal in the state of New Jersey. Drakos had changed his plea to guilty after Judge Ahto accepted the prosecution's argument that internet sports betting is illegal even though the state Legislature has not specifically banned it. As such, the recent proceedings where simply for sentencing. Judge Ahto felt that as Drakos was up front regarding the website he hosted and most people don't realize that internet sports betting is illegal he would be relatively easy on Drakos regarding sentencing. Judge Ahto stated " I don't think Mr. Drakos was trying to hide what he was doing. It's not like this was a clandestine operation." To this Judge Ahto added that he had wished a higher court in New Jersey would have the opportunity to review the legitimacy of internet sports books, casinos, and poker rooms. However, most likely this will not happen as Drakos' lawyers did not appeal Ahto's trial court finding. Judge Ahtos has a strange definition of light sentencing for something someone did out of misunderstanding. Drakos has been sentenced to the eight days he already served in the Morris County jail after his arrest. In addition Judge Ahtos has imposed on Drakos 90 days on the Sheriff's Labor Assistance Program, a work-in-lieu-of-jail program. Drakos also must serve three years' probation and pay approximately $1,330 in fines. Granted, he got work instead of jail time, but 90 days still seems like a harsh penalty to me. Does he get paid for this 90 days worth of work? Had Drakos simply hosted a web portal that allowed advertising of various internet gambling sites, did not allow his face to be posted on the site, and did not have a phone number for customer assistance he may not have been in violation? There are many web portals hosted in the United States which advertise internet sports books, casinos, and poker rooms. It will be interesting to see if more advertising portal owners end up arrested and prosecuted for this victim-free crime. Posted on: March 6, 2006
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