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Timeline of Legal Events re: Online Gambling

This page is just the timeline.
For an analysis of what's legal and what's not, see our other article,

Is Online Gambling Legal?

by Michael Bluejay, Last Updated: January 2016

 2016

January 14.  Haden Ware of World Sports Exchange (WSEx), returns to the U.S. from Antigua to surrender, and pleads guilty.  He'd been a fugitive since 2002. (AP)  His business partner, Jay Cohen, served 17 months starting in 2000.

May.  Haden Ware (see above) is sentenced to a mere six months probation. (SBR)

 2013

February 21.  Nevada becomes the second state to legalize online gambling (in the form of online poker), and the first to legalize interstate online poker (launching on April 30). (Reuters)

February 26.  New Jersey becomes the third state to legalize online gambling (poker and casino), when the governor signs it into law, launching on Nov. 25th). (NY Times, Press of Atlantic City)

April 30.
  The first expressly-legal online gambling in the U.S. launches: online poker in Nevada. (LVRJ)

November 25.  Legal online gaming goes live in New Jersey. (cir.ca)

November 26.  Legal online gambling goes live in Delaware.  They were the first state to approve it, in June 2002, but only the third to go live. (Casino.org)

 2012

February.  The feds indict Calvin Ayre (founder of Bodog) and four other Canadians, charging them with operating an online sports betting business, and money laundering.  But as I write this, the feds don't have anyone in custody, and will they be able to actually effect arrests?  The feds also seized the Bodog.com domain, which is fairly irrelevant as Bodog had been smart enough to move its business to non-.com domains months before the seizure.  (Forbes, 2012)

February.  The District of Columbia repeals the legalization of online gambling it passed in April 2011 before it ever became active. (NY Times)

June 28.  Delaware becomes the first state to legalize online gambling (casino-style gambling). (USA Today)

July.
  Full Tilt Poker CEO Ray Bitar is arrested for the April 2011 indictment. (GPWA) And Brent Beckley, an owner of Absolute Poker, got a 14-month prison sentence after admitting to misleading banks about the nature of the company's transactions. (Reuters)

 2011

January.  The feds seize nearly $8 million from processors serving PokerStars, Full Tilt Poker, Ultimate Bet and Absolute Poker. (Forbes)

April.  The feds seize the domains of Full Tilt Poker, PokerStars, and Absolute Poker, and charge 11 individuals with bank fraud, illegal gambling and laundering billions of dollars. (PokerListings)
April 11. The District of Colmbia becomes the first jurisdiction to legalize online gambling in the U.S..  However, the measure is repealed in February 2012 before it ever became active. (NY Times)

May.  The feds seize the domains and issue indictments against companies taking sports bets online, as well as poker room DoylesRoom.com.  (Casino City)   Bradley Franzen, one of the payment processors targeted in January, pleads guilty. (Forbes)

May.  Police officer Roland Benavides of Oklahoma was charged after being caught gambling online.  Oklahoma doesn't specifically outlaw online gambling, but their draconian statutes outlaw just about any kind of gambling whatsoever, so they charged under the general gambling statute. (Norman Transcript) This is one of only two cases I know of in which a player was charged under a state law.  (The other being Jeffrey Trauman in 2003.)

December.  The DoJ finally agrees that the 1961 Wire Act applies to only sites taking sports bets, not casino/poker.  This paves the way for states to start legalizing online gambling, in 2012. (Online Poker News)


 2010

JanuaryDavid Caruthers, CEO of U.K.'s BetOnSports, pleads guilty to federal racketeering charges for running on online sports betting service, and is sentenced to 33 months in prison. ( The Register)  He's released in 2011. (Gambling911)

April. Daniel Tzvetkoff, an Australian who founded the payment processor Intabill, is indicted by the feds in New York for conspiracy, money laundering, and bank fraud. (Pepper Hamilton LLP)

May.  Douglas Rennick, who ran a Canadian payment processor, is pleads guilty to moving gambling money and agrees to forfeit $17 million.  He faces 6 to 12 months in jail when sentenced in September. (Bloomberg)

June. Andrew Thornhill of the payment processor Intabill pleaded guilty to conspiracy to conduct an illegal gambling business and bank fraud. (Pepper Hamilton LLP)

August.  Ahmad Khawaja of Allied Systems and Allied Wallet (payment processors for PokerStars) forfeits the $13 million the feds seized the previous year. (Forbes)

September.  Douglas Rennick, who ran a Canadian payment processor, is sentenced to a mere six months probation.  He had already earlier agreed to forfeit $17 million. (Best Poker Sites)

October. Andrew Thornhill of the payment processor Intabill was sentenced to three months in prison and fined $25,000. (Pepper Hamilton LLP)

November.  The feds seize money in accounts belonging to payment processor eWalletXpress, and force them out of the U.S. market. (Casino City)

December. Party Gaming co-founder Anurang Dikshit is convicted of violating the Wire Act with his poker site (although the Wire Act doesn't apply to poker), and sentenced to one year's probation.  He had already forfeited $300 of income. (Forbes)

 2009

April. David Caruthers, CEO of U.K.'s BetOnSports, pleads guilty to federal racketeering charges for running on online sports betting service.  (He's sentenced to 33 months in Jan. 2010, but released in 2011.)  (Gambling911)

April. Party Gaming agrees to pay $105 million to avoid prosecution. (GPWA)

June. The feds freeze over $30 million in payouts to online poker players. The poker rooms paid their payment processors, who was supposed to pay the players, but the feds froze the processors' accounts before the players could be paid. (Washington Post)

August 2009. Douglas Rennick of Canada is indicted in the U.S. for processing payments for online casinos through U.S. banks.

September. Feds seize ten U.S. bank accounts between June and September they said were related to online gaming (likely accounts of payment processors who were trying to pay winning patrons). (GPWA)

November. BetOnSports founder Gary Kaplan is sentenced to four years in prison and ordered to forfeit $44 million in revenue.

November. FirePay (aka Optimal Group), a payment processor, settles with the U.S. DoJ for $19 million for processing payments for online gambling sites between 2004 and 2006...before the UIGEA made that activity clearly illegal. In exchange, the DoJ won't pursue criminal prosecution. (Reuters)

December. BetOnSports is fined $28.2 million.



 2008

June. Barney Frank and Ron Paul's HR5767 bill to legalize and regulate Internet gambling failed to make it out of the House Financial Services Committee. Even an attempt to simply define "unlawful Internet gambling" to provide clarity to banks and policing agencies also failed. (iGamingNews)

September. A Kentucky judge agrees to allow Kentucky seize 141 gambling-related domain names, since online gambling violates Kentucky law. This is plainly absurd -- by that logic any country could seize any domain anywhere in the world if the website happened to violate local law. The Kentucky Court of Appeals quickly overturns the action. (EFF)

December. Anurang Dikshit, co-founder of Party Gaming, pleaded guilty to violating the 1961 Wire Act by his company taking poker and casino bets from Americans, and was ordered to pay $300 million, and possibly spend up to two years behind bars. (Never mind that the Wire Act doesn't specifically criminalize taking poker and casino bets over the Internet, but in the Bush era, ignoring the law is all the rage.) (Times Online)   Two years later he is sentenced to one year of probation.

 2007

January. U.S. authorities arrest the founders of Neteller, a service that allowed U.S. players to get money into an online casino / poker room / sportsbook. Neteller stops serving U.S. players within days. (Creator.com, Covers.com, iGamingNews, GPWA)

January. The Department of Justice subpoenas four foreign investment banks which had underwritten some online casinos. (Casino City, GPWA)

February. The FBI seizes customers' Neteller funds as evidence. (UISA Today)

March

  • Neteller announces a deal with the FBI to return players' funds to the players within 75 days. Neteller stops serving Canadian customers.
  • WTO rules yet again that the U.S. is not in compliance. The U.S. continues to ignore the rulings of the international court. (Beta News, Poker News)
  • BetOnSports founder Gary Kaplan is arrested in Puerto Rico.

April. Rep. Barney Frank files a bill which would take much of the sting out of the UIGEA, and take the first steps towards U.S. regulation of online gambling. Most doubt that the bill has any chance of passing. (GPWA)

November. The House of Representatives holds a hearing about online gambling. The U.S. attorney admits that's it's not against the law for players to gamble online. (See our full report about the hearing.)

December. Google, Yahoo, and Microsoft pay a fine for accepting ads for online gambling, in a case dating back to 2003. It's not even clear that such advertising is illegal, but the companies apparently felt it was easier to settle. Google's fine amounted to only about 1/3 of its profits for a single day. (NY Times, Point-Spreads.com)

December. After losing the WTO case, the U.S. had three choices: (1) Specifically legalize online gambling, (2) pay huge compensation to its trading partners, or (3) give them huge concessions. The U.S. chose door #3, granting trade concessions to the complaining countries. (L.A. Times, GPWA) Antigua, which brought the case in the frist place, had requested $3.4 billion in annual damages, but was awarded only $21 million. Antigua is now allowed to suspend copyright on American movies and music. (SF Gate)


 2006

January. The Sporting News (TSN) took its time in dropping gambling ads (six months) after receiving the warning from the DoJ, which pissed off the government, which three years later fines them $7.2 million. The settlement represents TSN's profits on the ads for the three years it accepted them (2000-2003), and is paid with $4.2 million in cash, and $3 million in public service ads in its own publications explaining how online gambling is illegal. (more from the Corporate Crime Reporter, the Olympian, and Media Buyer Planner)

February. Before Casino City's appeal can be heard (see 2004), it withdraws from the case, saying it thinks it made its point. It intends to fight if it ever gets charged with accepting gambling ads.

April. The U.S. ignores the deadline for complying with the WTO ruling. (Online Gambling Insider)

May. There's an attempt to ban Internet gambling in every legislative session, and this one is no different. As of this writing, two bills have cleared committees and are proceeding to the full House of Representatives. (River City Group)

May. The U.S. charges the operators of an offshore sportsbook with soliciting bets from U.S. players. They've actually been fugitives since receiving charges in a separate case in 1998. The primary target, William Scott, renounced his U.S. citizenship in 2004 and moved from Ohio to his homes on the Caribbean islands of Antigua and St. Maarten in the Netherlands Antilles. Most of the media coverage of this comes straight from the U.S. government press release, so it's highly biased and uses lots of negative words to describe the pair: fugitive, illegal, money laundering, etc. Nary a mention is made that the U.S.' actions itself is illegal, violating the finding of the World Trade Organisation court that the U.S. may not prohibit gambling advertising. (Die is Cast, PC World)

June. Washington state officials shut down the web portal IntegrityCasinoGuide.com, but the site owner apparently faces no penalties. (The Online Wire)

July. David Carruthers, CEO of UK-based BetOnSports, is arrested by U.S. authorities while changing planes in Texas on the way from the U.K. to Costa Rica. (USA Today)

July. The U.S. House of Representatives passes HR 4411, the Internet Gambling Prohibition and Enforcement Act, by a vote of 317-93. It now goes to the Senate. (iGamingNews)

September. Peter Dicks, chairman of UK-based Sportingbet, is arrested while visiting New York, at the request of Louisiana authorities who said Sportingbet violated Louisiana's ban on Internet gambling. (iGamingNews)

October. Republicans slip in an anti-Internet gambling amendment into the unrelated Safe Ports bill. It prohibits U.S. banks from processing online gambling transactions, which doesn't change things much because U.S. banks have been largerly out of that business for years. It also allows the government to direct webhosts to disable a website's links to online gaming sites, though it seems that webmasters can easily get around this by simply locating their websites outside the U.S. Attorney Nelson Rose believes that webmasters who advertise online gambling sites on a revenue-share basis (vs. CPA, PPC, or flat monthly rate) could be charged with aiding & abetting illegal online gambling, but his analysis is far from clear. More:

 2005

April. Ignoring the WTO ruling, the Department of Justice subpoenas Esquire magazine for taking ads for online gambling.

April. Antigua wins its appeal in the WTO case. The new victory weakens the original one, but is still a victory nevertheless. Typically, the U.S. ignores the ruling and continues to act as though it didn't happen. Newsweek (Sept. 2007) has a good article about the case and its implications. (also Casino City, CNET )


 2004

The webmaster of the portal InternationalNetCasino.com is indicted by New Jersey authorities, since he took money from would-be players directly in order to help them place bets. It seems that if he had simply advertised the gambling operations and not gotten directly involved he probably would have been okay. Even so, his sentence was light: the eight days he'd already served in jail, $1330 in fines, and 90 days of community service. (more from Gambling 911, iGamingNews)

The website CasinoCity.com sues the DoJ to establish its right to accept ads for Internet gambling. A judge dismisses the case, saying Casino City doesn't have standing because it hadn't received one of the cease & desist letters. Casino City files an appeal,

November. Antigua wins the WTO case against the U.S., but the U.S. vows to appeal. (arstechnica, MSNBC) (The U.S. would eventually lose all appeals.)


 2003

The tiny island nation of Antigua, home to many Internet gambling companies, sues in the World Trade Organisation court, challenging the U.S. ban on gambling ads, saying it violated free trade agreements. (It would eventually win.)

The U.S. Department of Justice sends a letter (PDF) to the National Association of Broadcasters, and to some major media outlets (e.g., Google, Yahoo, Esquire, The Sporting News) warning them that accepting ads for online gambling could be illegal. The recipients all stopped accepting ads. None of them ever faced any legal action, but The Sporting News did get fined, for not ceasing the ads quickly enough. (See Jan. 2006.)

Jeffrey Trauman was charged under the law of his state (North Dakota) for gambling online.  He paid a $500 fine on what was probably over $100,000 in sports bet winnings.  This is one of only two cases I know of in which a player was charged under a state law.  (The other being Roland Benavides in 2011.)   (Gambling & the Law)


 2000-2002

American Jay Cohen runs the World Sports Exchange sportsbook in Antigua, but when he returns to the U.S. he is arrested, convicted, and sentenced to 21 months. prison. (WinnerOnline, 2000)

The U.S. 5th Circuit Court of Appeals rules that the Wire Act applies only to bets on sporting events or contests, not wagers in general. (BusinessWeek, 2002)


Even more cases are covered in this extremely detailed 2012 article on BettingMarket.


WTO Timeline

2003.  The tiny island nation of Antigua, home to many Internet gambling companies, sues in the World Trade Organisation court, challenging U.S. anti-gambling laws, saying it violated free trade agreements.

November 2004.  Antigua wins the WTO case against the U.S., but the U.S. vows to appeal. (arstechnica, MSNBC)  (The U.S. would eventually lose all appeals.)

April 2005.  Antigua wins its appeal in the WTO case. The new victory weakens the original one, but is still a victory nevertheless. Typically, the U.S. ignores the ruling and continues to act as though it didn't happen. Newsweek (Oct. 2007) has a good article about the case and its implications. (also Casino City, CNET )

April 2006.  The U.S. ignores the deadline for complying with the WTO ruling. (Online Gambling Insider)

March 2007.  WTO rules yet again that the U.S. is not in compliance.  The U.S. continues to ignore the rulings of the international court. (Beta News, Poker News)

December 2007.  After losing the WTO case, the U.S. had three choices: (1) Specifically legalize online gambling, (2) pay huge compensation to its trading partners, or (3) give them huge concessions. The U.S. chose door #3, granting trade concessions to the complaining countries. (L.A. Times, GPWA)  Antigua, which brought the case in the first place, had requested $3.4 billion in annual damages, but was awarded only $21 million.  Antigua is now allowed to suspend copyright on American movies and music. (SF Gate)



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Also, know that Parkinson's drugs encourage gambling


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Gambling problem?
Call the 800-522-4700 hotline, and read this.

Also, know that Parkinson's drugs encourage gambling.