On February 29th the US Justice Department secured a guilty verdict against Jay Cohen one of the operators of the World Wide Sports Exchange for violatations of the 1961 Wire Act. The following is the reaction from the Interactive Gaming Council following the verdict.


Vancouver, Canada (March 1, 2000) – Following a one-sided trial in which
the defense was denied even minimum standards of fairness and due process,
the United States Justice Department yesterday obtained a conviction of
online entrepreneur Jay Cohen in U.S. district court for violating the 1961
Wire Act.

Sue Schneider, the Chairman of the Interactive Gaming Council, stated: “We
are disappointed that the Justice Department decided to pursue this case,
even though Jay Cohen was operating a licensed and regulated gaming
establishment and causing harm to no one. However, our disappointment is
dwarfed by the Council’s concern about the Orwellian tactics that the
prosecutors used to obtain this conviction. Not only was Mr. Cohen precluded
from offering a substantive defense, the judge in the case would not even
let the jury have a complete or accurate copy of the Wire Act upon which to
base their decision. This type of ‘convict now and find facts later’
prosecution should be troubling for all members of the Internet community.”

Schneider continued: “Cohen’s defense was based upon a reasonable and
literal reading of the criminal code, as well as the fact that he was
licensed and supervised by gaming regulators in the sovereign nation of
Antigua. However, Judge Griesa prevented any hint of such a defense from
being presented to the jury. By putting Cohen in a legal straightjacket, the
judge almost assured the prosecution of a conviction and denied him due
process and other civil rights.. Nevertheless, even with such bias from the
bench, it is clear that, the jury struggled with the fundamental question of
Cohen’s innocence, taking more than two full days to deliberate before
reaching its conclusion.”

During its deliberations, the jury asked for a copy of the Wire Act (18
U.S.C. sec. 1084) to determine whether Cohen’s actions were indeed criminal.
The judge sent to the jury a copy of the statute, but had the provision of
section 1084, which contained a legal defense for Cohen, removed without any
trace. Jurors were not even told that parts of the statute had been removed.
Faced with an incomplete statute – one lacking the defenses approved by
Congress – the jurors had no choice but to convict.

IGC Vice Chairman Albert Angel added: “This case should not be interpreted
as a black mark on the interactive gaming industry as a whole. It is widely
understood in the legal community that nearly four-decade old Wire Act does
not apply to casino-style gaming conducted on the Internet.”

While Cohen’s conviction is extremely troubling, it is based on a law that
applies strictly to sports wagering by telephone and in which there is no
mention of the Internet at all. Had prosecutors attempted to indict licensed
and regulated online casino operators (as opposed to Cohen and World Wide
Sports Exchange), the outcome would have been far different.

“The IGC fully backs Mr. Cohen because we believe he is the victim of a
biased prosecution and trial. We urge him to appeal this unfair outcome so
that his case does not become a precedent for overzealous prosecutors in the
future,” said Angel.

The Interactive Gaming Council is the global trade association for online
operators, software designers, financial services providers, and publishers.
With more than 80 members in 16 countries, the Council advocates for the
creation of an international regulatory framework that ensures industry
integrity, consumer protection, and the collection of all appropriate fees
and taxes.

Sue Schneider
(314) 946-0820