Online Operator Arrest Saga
By claire
A federal appeals court, yesterday, upheld the conviction of a San Francisco man who operated a sports betting business on the Internet, concluding that the business engaged in illegal gambling. Lawyers for Jay Cohen, 34, formerly of Woodmere, N.Y., had argued that Cohen did not violate the U.S. Wire Wager Act by accepting bets and wagers on sports events from Americans over the Internet and telephones. They contended his business did nothing different than off-track horse race betting facilities operated by states throughout the nation. The lawyers told the 2nd U.S. Circuit Court of Appeals that Cohen's business was legal because online betting is leagl in Antigua, where the business was based. But the Second Circuit rejected the arguments, saying betting was clearly illegal in New York.

Cohen was sentenced a year ago to one year and nine months in prison for violating the U.S. Wire Act. The conviction by a jury came in the first use of the Wire Wager Act to shut down an Internet gambling operation, prosecutors said at the time. As president of the World Sports Exchange, Cohen had set up his business in time for 1997's Super Bowl. Cohen was president of World Sports Exchange, a sports betting company that advertised for customers in U.S. newspapers and magazines, inviting gamblers to visit its Internet site or call a toll-free number. Cohen was among 22 defendents charged in March 1998 with operating offshore companies which took bets from Americans over the Internet or on telephones.

Mark M. Baker, a lawyer for Cohen, said he was disappointed by the ruling and would appeal. "We feel the court ignored several compelling contentions," he said. He said Cohen's business was no different than any state's off-track betting business, which allows interstate bets to be placed over a wire. "There are about 800 web sites out there right now doing exactly the same as the World Sports Exchange and it doesn't look like any of them are being criminally prosecuted," Baker said.

Marvin Smilon, a spokesman for U.S. Attorney Mary Jo White, said prosecutors had no comment on the ruling.

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