|The 3rd US Circuit court of Appeals last week gave an ruling that allows the US government to size funds from US companies acting as middlemen to foreign companies taking Internet sports wagers from US citizens. |
Two foreign companies, Intercash Ltd I.O.M. in the Isle of Man and American Sports Ltd. in England advertised their services to Americans on the Internet, and used an American middleman company, Intercash Financial Services in New Jersey, to accept wire transfers from Americans to place bets.
Intercash and American Sports Ltd. assert that since all bets were accepted in England and the New Jersey company had no role in fixing odds, declaring winners or losers, accepting or relaying bets and wagers, their business was beyond US jurisdiction.
Their lawyers argued that under a generally accepted conflict of laws principle, a gambling transaction occurs in the country where the bet or wager is accepted.
3rd Circuit Judge Theodore A. McKee concluded that the foreign companies 'are therefore actually arguing that the laws of England insulate them from forfeiture based upon their conduct in New Jersey.”
Instead, McKee found that the US government's only burden was to prove that the New Jersey company was violating New Jersey law by 'promoting' gambling. This, McKee said, was proved “solely upon conduct that occurred in New Jersey.'
The effects of this decision could be wide ranging for the Internet betting and casino industry, which is illegal within US borders. Despite the said illegal status of Internet gambling in the US, a large proportion of offshore betting and casino sites’ income derives from US customers.