Gambling Online: Is It Legal?

The issues involved in legislating online gambling are a lot more complicated today than they were six years ago when Sen. Jon Kyl (R-Ariz) first introduced the bill known as the Internet Gambling Prohibition Act of 1997. At that time National News reporter David Isaacson had written that online gambling had grown into a 300 million dollar industry and there were about 32 online gambling sites.

In March 2002, Andy Sullivan of Reuters reported that Christiansen Capitol Advisors estimated gambling sites took in about $2.2 billion in revenues in 2000, and would collect $6.4 billion by 2003. At the time Sullivan wrote his article, there were about 1400 online casinos. Today there are between 1800 and 2000.

Back in 1997 the American economy was still booming and dot.coms hadn't yet gone bust but today advertising revenue from offshore gambling sites fuel the Internet economy. Over the past few years, Internet businesses have been scrambling to stay afloat and the advertising revenue from these gambling sites has been too irresistible to refuse. If that revenue were to be suddenly cut off, many Internet companies would feel the crunch.

David Schepp of the BBC reported in February that online gambling had become the fifth largest advertiser online, jumping to 2.5 billion from 910 million ads last year. "Online gambling firms are now advertising on more mainstream sites, thus appealing to whole new groups of gambling enthusiasts."

He interviewed Charles Buchwalter, head of media research at Jupiter Media Metrix who said that, ""Online casinos are now competing for advertising with the most visible industries, including retail, financial services and travel…The fact that casinos are [moving] their ad-buys from niche sites to mainstream portals is proof that this sector is going mainstream," Buchwalter says.

Those "mainstream portals" include sites like Yahoo! and Excite."

Since most of these offshore gambling sites are out of the reach of US authorities and are legal in the countries where they exist, there is really little US authorities can do to stop them. Roy Mark of JupiterMedia.com reported in March that 60 percent of all offshore gambling dollars comes from Americans.

According to the Justice Department, Internet gambling is illegal for Americans. The courts have ruled that under the 1961 Wire Wager Act, which prohibits the use of phone lines for placing sports bets, Internet sports betting is illegal.

Jay Cohen, who was president of the World Sports Exchange (WSE) in Antigua, was one of the first of 22 defendants charged in March 1998 under the Wire Act.

Reporting for Yahoo Internet Life in 1999, Justin Ware described how the then 27 year old Cohen, who had been a trader on the San Francisco Stock Exchange had started one of the first online sports books in 1997 by working out of a small office suite in Antigua. "After a couple of investors agreed to back him, he persuaded two friends to join him: Steve Schillinger, an options trader with more than 18 years of experience and a head for numbers; and Haden Ware, a student Cohen had met on the trading floor. The World Sports Exchange was born."

According to Ware (no relation to Justin Ware), nearly three years after the launch of their business, Jay Cohen was in Seattle awaiting trial, and Schillinger and Ware were considered fugitives. Cohen chose to go back to the US and fight the charges; Ware and Schillinger chose to stay and run the business. Fortunately for them, and frustratingly for the FBI, as long as they stayed in Antigua, they couldn't be touched. Since extradition requires both countries to agree on the offense, and Antigua considers online gaming to be perfectly legal, Ware and Schillinger couldn't be extradited, Ware reported.

"Haden Ware was a student on his summer break when he went down to help Cohen and Schillinger, '"When I first came down here, I was going to school…Jay called me up and said, 'I'm going to the Caribbean. Are you in?' And I said, 'Yeah, I'll come down, take a summer off, have a good time.' It's turned out to be a little bit longer than that,"' He was reported as saying.

Steve Kanigher quoted Cohen in the Las Vegas Sun in March as saying that when he decided to go back to the US to fight the charges he had a conversation with Schillinger. "I said that I would come back to fight this. He said that he was staying there in Antigua. I said one of us is making the right decision."

Ware reported that the decision to work from Antigua was intended to keep things legal. He quoted Schillinger as saying, "We were very open about what we did…. If we could have done this in San Francisco, we would have. We came down here because we thought we would be licensed to do what we wanted to do."

Stephen Nover of The Prescription reported in October that Cohen didn't believe he was breaking any laws. He was accepting wagers in Antigua, where bookmaking is legal. He came back to America to fight the charges and was the only defendant of those charged who challenged the system.

Nover reported, "After losing his case in a controversial manner when the judge instructed the jury how to vote, Cohen appealed. He lost his appeal two years ago, and found out in June that the Supreme Court would not review his case.

U.S. District Judge Thomas Griesa sentenced Cohen to 21 months in federal prison and a $5,000 fine." Cohen began serving his time on October 15.

Of the initial group charged in 1998, thirteen pleaded guilty and seven are still fugitives including Steve Schillinger and Justin Ware who are still in Antigua.

Today World Sports Exchange is one of the largest sports books in the world with a customer base estimated to be around 30,000.

Mark Fineman of Business 2.0 wrote an article on the World Sports Exchange and of Schillinger and Ware in October 2000.

"Meanwhile, when they're not holding epic pool parties, they're running WSE and watching the money come in -- and there's a lot of money coming in. In the two and a half hours it took U.S. District Judge Thomas P. Griesa to sentence him, Cohen's website in Antigua took in seven times his $5,000 fine in bets on the New York Yankees-Oakland A's game alone, a fraction of the tens of thousands of dollars' worth of Internet bets placed with WSE that day," Fineman reported.

He quoted Schillinger as saying, "I was a great citizen of the U.S. I coached my kids in the Little League [and the Catholic Youth Organization basketball league]. My assistant coach was an FBI agent. He knew what I was doing. I gave a lot to my community, and for them to say I'm a criminal? Don't tell me the U.S. government thinks gambling is the worst thing in the world."

Last March Kevin McCory of USA Today interviewed Sebastian Sinclair, CFO of Christiansen Capital Advisors; a New York consulting firm that studies the gaming industry. He said, "Online sports gambling is clearly illegal today…But how effective has that prohibition been so far? Not very."

In October Michael Hiestand of USA Today, quoted Joe Read, who directs customer service for a Costa Rica-based sports betting site, as saying that Cohen's conviction led "industry people to protect themselves by getting local people to front their businesses. That's the loophole. An American can run the business but no one can find out," he said.

Hiestand also interviewed industry consultant John Musch who said bettors would inevitably find their way around any ban, especially as more countries begin to allow online betting. According to Musch the U.S. needs to regulate Internet gambling. '"The legitimate operators would welcome that since they'd then seem more legitimate."'

When the authorities first used the Wire Act as the basis for their charges against online gambling sites there were questions as to how well the act would hold up under the law. The Interstate Wire Act of 1961 prohibits sports wagering between states using telephone lines or through other wired devices. Since the Internet had not been in existence in 1961 there were questions as to how that could possibly apply to the Act.

In June 1999, Tim Ito and Sharisa Staples of the Washingtonpost.com reported, "despite the Justice Department action, many legal scholars question how well existing laws can be applied to new technologies. The Wire Act, for example, does not explicitly mention the Internet. It is also unclear how well the law would apply to satellite based transmissions, which are not considered wired devices."

Ito and Staples quoted Nelson Rose, professor of law at Whittier Law School who said, "Changes in [gambling] law follow changes in society…But our society has been changing so rapidly . . . sometimes the law cannot keep up."

Kanigher reported that some legal experts believe the Wire Act applies only to sports wagering. Kanigher cited a federal ruling in Louisiana upheld in 2002 by the 5th U.S. Circuit Court of Appeals that had come to the same conclusion. "The courts ruled against two Internet gamblers who sued credit card companies and banks after accumulating gambling debts from casino-style gaming websites.

The gamblers argued that the credit card companies and banks, working in conjunction with the websites, created a worldwide gambling enterprise that facilitated illegal gaming, making their debts unenforceable. But as part of their dismissal of the lawsuit, both courts ruled that the wire act applies only to bets on sporting events or contests."

While the existing laws continue to be confusing some senators are trying to get new legislation passed to make online gambling illegal once and for all. In an attempt to stop it at the source, Sen. John Kyl's (R.-Ariz) most recent legislation wants to cut off American access to Internet gambling sites by prohibiting U.S. banks, credit card companies and other Internet payment systems from making payments to the gambling sites.

The bill would allow the State and Federal Attorney Generals to request injunctions against financial institutions, Internet Service Providers, or computer software providers that fail to assist in the prevention or restraint of Internet gambling. The Kyl bill, S. 627, applies criminal penalties of up to five years in prison to operators of Internet gambling sites.

The Senate Banking Committee expressed strong support for the Kyl bill during a hearing in March. The House Judiciary Committee's subcommittee on crime passed the House version of the bill authored by U.S. Rep. Jim Leach of Iowa in May. It had already won the support of the House Financial Services Committee in March. The legislation has previously passed both the Senate and the House, but never in the same session of Congress.

Many credit card companies have already distanced themselves from online gambling. According to Beth Cox of Ecommerce News, as of July the list includes Bank of America, Fleet, MBNA and Chase Manhattan, as well as Citibank, which controls about 12 percent of the U.S. credit card market.

Cox further reported that credit card transactions are often coded to indicate what is being bought or sold. By blocking certain codes, banks that issue credit cards can avoid issuing credit for much of the gambling activity that occurs on the Internet.

This sounds logical in theory but according to information made available by the Australian Bankers' Association in late April, this is not always easy to do. The recommendations, which pertained to the Interactive Gambling Act that was passed in Australia in June 2001, reported a number of problems in being able to block credit card transactions.

The Association reported that the blocking of service codes, would likely be effective for credit card purchases occurring directly between the customer and the gambling merchant, provided the merchant has correctly coded the gambling transaction. However there appeared to be a number of means by which the correct identification of illegal interactive gambling transactions might be avoided. One possibility was for gambling merchants to use incorrect credit card transaction service codes in order to avoid identification of gambling transactions.

The Australian government initially promised amendments to the 2001 Interactive Gambling Act that would consider the feasibility of blocking credit card transactions for overseas gambling sites. It has since backed away from introducing such rules, warning there were many problems with that level of regulation.

The Australian Bankers' Association also pointed out that gambling sites, which are legal in their own countries, could easily set up player accounts with offshore financial institutions. They also sited the use of online payment providers as a means for individuals to make transactions with online gambling sites.

In the past companies like PayPal predominated the online gambling payment market. This is no longer the case, however, since PayPal recently decided to stop taking gambling payments due to the uncertainty of the law.

In June New York Attorney General Eliot Spitzer subpoenaed PayPal's records relating to the use of the payment service by gamblers. At that time PayPal agreed to stop online gambling companies from using the service to accept money from gamblers who resided in New York State. In August Beth Cox of InterneNews.com quoted a spokesperson from PayPal as saying, it was "taking the action in "voluntary cooperation with the attorney general and was not admitting to a violation of law.""

Cox reported that under the settlement, PayPal agreed not to process payments to online gambling sites from New York customers as of Sept. 1 and would pay $200,000 to New York State to cover costs of the investigation and penalties.

Joanna Glasner of Wired.com reported in July that under the terms of its planned purchase of PayPal (PYPL), eBay decided that it would stop offering the payment service for Internet gambling transactions. It attributed the decision to an "uncertain regulatory environment surrounding online gaming."

Under the USA Patriot Act, it is prohibited to transmit funds known to have come from a criminal offense, or that are intended to promote or support unlawful activities. Attorney for the Eastern District of Missouri told eBay that its online payment service PayPal had violated provisions in the USA Patriot Act between October 2001 and July 2002, Dawn Kawamoto reported for CNET in March.

It was alleged that PayPal violated laws regarding the processing of online gambling payments, and eBay the parent company of PayPal was asked to hand over nine months of the gambling-related earnings in the settlement.

According to Brian McWilliams of Wired.com nearly 500 gambling sites signed up to accept PayPal in the first quarter of last year, almost doubling the company's roster of such merchants, which stood at 1,022 as of March 31, 2002. McWilliams reported in June "in exchange for taking such a risk, PayPal was expected to derive more than $16 million from Internet gaming in 2002. Already this year, its revenues from such merchants -- who pay higher fees to offer the PayPal service -- have more than doubled, accounting for 8 percent of its total income."

Kawamoto reported that PayPal received 6 percent of its revenue from online gambling, according to its filing with the Securities and Exchange Commission last year.

Glasner interviewed Keith Furlong, of the Interactive Gaming Council, who said that with PayPal out of the picture, gamblers would likely turn to competing online payment services such as Neteller and Firepay. Firepay is governed under the laws of Bermuda.

Another alternative payment system being used by online gamblers and cited by the Australian Bankers' Association is the use of electronic cash or e-cash.

In March Rod Smith of The Delaware News Journal quoted gaming author Mark Schopper as saying that 'according to the Treasury Department electronic cash was "the biggest money laundering threat ever seen". Schopper said the Kyl legislation banning credit cards for online gambling would likely have "tremendous unintended consequences encouraging money laundering."

Not everyone believes that Kyl's legislation will prevent Internet gambling in the US. Rep. John Conyers D-Mich thinks Kyl's legislation would do little to stop online gambling and in March introduced a bill that competes with the legislation. The bill would create a five-member federal gaming commission, appointed by Congress, to study Internet gambling for one year and recommend the best methods of regulating it.

Doug Abrahms of the Reno Gazette-Journal quoted Conyers as saying, '"You might remember a failed experiment the U.S. government tried in the 1920s called Prohibition…Instead of a prohibition that will drive gambling underground and into the hands of unscrupulous merchants, Congress should examine the feasibility of strictly licensing and regulating the online gaming industry."'

Abrahms also quoted Rep. Ron Paul, R-Texas who said '"This whole idea of the invasion of our house (by Internet gambling) is incorrect. You do have the brains to turn it off…We're trying to regulate behavior."'

In an editorial he wrote in February Conyers said, " If you want to prevent money laundering, the last thing you would do is eliminate the financial controls and record-keeping that credit cards and U.S. bank accounts provide. …. Children can be kept off of gambling websites, however, by requiring the use of a credit card, PIN numbers, and other screening devices. ….

Finally, we must also consider the needs of problem gamblers. Online gambling sites present difficulties for these individuals, just as land-based casinos do. Using the Internet, however, it is possible to set financial limits on an individual's gambling, through the use of shared record-keeping."

James Pearce of ZDNet Australia reported last February that the Interactive Gambling Act passed in Australia in July 2001 had done little to stop Internet gambling. Although the Act specifically banned Internet gambling, it still allowed online sports betting and lotteries to continue legally.

Pearce interviewed Chris Downy, executive director of the Australian Casino Association who reported the results of a survey done by the Association. The yearlong survey found that 40 percent of online gamblers still visited overseas casinos. Downy also noted that the survey showed the number of online gambling sites visited by Australians had increased by 38 percent between February and December 2001, despite the legislation being introduced in July.

'"The level of interest in online gaming remained relatively consistent throughout the year and actually increased in July 2001, at the same time as the introduction of the Interactive Gambling Act" he said.'

Under the legislation, it is an offence to provide an interactive gaming service to customers in Australia and to advertise such services-including online casino-style services involving games of chance or mixed chance and skill, such as roulette, poker, craps, online poker machines and blackjack. However, betting on horses or greyhound racing, or other sporting events and lottery services are currently exempt under the act.

One of the reasons Internet casino gambling was banned in Australia was because of increased incidents of problem gambling in areas where land based electronic gaming machines had been installed such as in New South Wales and Victoria. In areas where there was less accessibility to the electronic gaming machines there were fewer gambling problems. Whether these land based machines can be considered equivalent to Internet gambling sites is difficult to say.

During inquiries to the Interactive Gambling Bill in 2000 the committee also received evidence that despite the availability of online racing services to Australian homes there was little evidence of a parallel increase in problem gambling. The Home Racing channel, which had been available on Sky Channel in Australia since Sept 5, 1998, had not resulted in a perceptible surge in problem gambling. It was noted, however, in the report that there were insufficient studies on sports betting in general to determine its impact on problem gambling.

This is different than what is happening in the US where the Wire Wager Act appears to bans sports betting but not online casino betting. The discomfort with sports betting in the US may be attributed to point shaving scandals that have occurred in amateur sports.

In his article, McCory reported that "in congressional testimony last summer, William Saum, the NCAA's director of agent, gambling and amateurism activities, warned that online betting could lead to a resurgence of the point-shaving scandals that tarnished basketball programs at Northwestern University and Arizona State University during the 1990s.

"When people place wagers on college games, there is always the potential that the integrity of the contest may be jeopardized and the welfare of student-athletes may be threatened," Saum said."

Point shaving scandals have been going on in amateur sports since as far back as 1947. CNN reported in March 1998 that thirty-two players at seven schools were implicated in a plot to fix 86 games between 1947-50. Included in the scandal were players from City College of New York and Kentucky (big names involved: Ralph Beard, Alex Groza and Sherman White). Other point shaving investigations went on between 1959-61, 1978-79, 1984-85, 1989, 1992, 1994, 1995, 1996 and 1997.

In his article last March McCory interviewed Steve Schillinger about bets being placed online for college basketball's March Madness. Schillinger told McCory that he expected the World Sports Exchange to have rung up as much as $2 million in bets for each day of the tournament. He quoted Schillinger as saying that even the Super Bowl, another major draw for sports gamblers, "is sort of a non-event in comparison."

Online sports betting tout Bob Hill believes the point shaving scandals have more to do with the fact that amateur players aren't paid for their participation in college sports. "The NCAA makes billions of dollars off of these amateur sports and yet the athletes never see a penny of that money. It has nothing to do with the Internet," he said. "These kids are easy prey because they are poor and need the money. It is not as if you can hold down a part time job when you're in a major college athletic program because it's a full time commitment. These kids barely have time to attend classes. Shaving scandals were going on long before the Internet."

Jennifer Goldblatt of Delaware Online, reported that sports betting is a more specialized form of gambling and attracts a much smaller set of gamblers than activities such as slots. She interviewed William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada-Reno who said, "With sports betting, even though there's a following, it tends to be one of the more technically challenging to do it right, … quite a bit of analysis that is done and marketing, as opposed to a slot machine, which is a pure chance game."

George F. Will, of Newsweek reported in November, "Gambling has been a common feature of American life forever, but for a long time it was broadly considered a sin, or a social disease. Now it is social policy: the most important and aggressive promoter of gambling in America is government.

Forty-four states have lotteries, 29 have casinos, and most of these states are to varying degrees dependent on you might say addicted to revenues from wagering."

Cohen, who was interviewed by Kanigher in the visiting room at the Nellis prison, said, '"I would respect Congress more if they said all gaming is bad and that they want to ban all gaming," Cohen said. "I wouldn't agree with it but I would respect it. But their real motivation is nothing more than anti-competition. It's protectionism. They're just trying to protect their home-grown industries."'

The position of the American Gaming Association, which represents the commercial casino entertainment industry, has remained constant since Congress first began considering Internet gambling legislation. According to Frank Fahrenkopf, President and CEO, the association "maintains the view that the technology necessary to provide appropriate regulatory and law enforcement does not presently exist with regard to Internet gambling… until those concerns can be adequately addressed, the AGA remains opposed to Internet gambling."

Benjamin Grove of the Las Vegas Sun reported in March that MGM MIRAGE, one of the largest operators of Las Vegas Strip hotels, last year became the first major U.S. gambling company to open an online casino, based in and regulated by the Isle of Man off the coast of Great Britain. MGM's online casino does not accept bets from the United States.

BBC World ClickOnline's Richard Taylor reported in November that "to keep Americans out, MGM has built a system that uses technology to monitor where players are betting from.

"We are 99.9% confident it catches anybody who's not of age or from places that don't currently allow online gaming for its citizens or operators," said Bill Hornbuckle of MGM Mirage Online.

MGM say their geographical verification software can identify where customers are coming from and prevent them from using the site."

Grove interviewed MGM MIRAGE spokesman Alan Feldman who said the Conyers proposal is a welcome indication that some lawmakers have open minds about how technology and the public appetite for gambling have evolved.

Taylor reported that attitudes are changing in Vegas by some of the entertainment corporations which run the Vegas casinos but that there is still apprehension by some companies because of the legalities involved. He interviewed David Strow of Harrah's Entertainment who said, "We've spent the last 65 years building up this company. We now have more than 24 casinos across the country, and billions of dollars invested. But the way it works in the US is that each of these casinos has to be licensed by a state in order to operate. They view it as a privilege not a right. If we're found in violation of federal or state laws regarding Internet gaming they have the right to take our licences. In essence we could lose our ability to operate our properties."

Kanigher reported that Nevada Gov. Kenny Guinn signed into law a bill in 2001 that directed state regulators to develop ways to license and regulate Internet gaming companies as long as they operated in compliance with federal laws. Kanigher interviewed Nevada Gaming Control Board Chairman Dennis Neilander who said that those regulations have not been developed because of the Justice Department's position that all Internet gaming is illegal.

'"The state law requires us to make a finding that it can be done applicable to federal laws," he said. "As long as the Department of Justice takes the position that it can't be done, we won't override that."…. "It's kind of a gray area right now because you're transmitting across state lines, so the federal law comes into play, and the federal law is unclear," he said.'

Susan Orenstein of IDG reported in June 2001 that the significance of Nevada legislators passing a law that paves the way for online gambling was that it indicated an "emerging shift in attitude of the casino industry. U.S. casino operators, who control $22 billion in legalized gambling, once strongly opposed betting on the Internet."

According to Reuters, Merle Berman, a Republican lawmaker from Las Vegas and the primary backer of the Nevada bill, said online gaming taxes and fees could generate more than $80 million annually for the state, reported Richard Stenger of CNN in June 2001.

A bill to study Internet gambling sponsored by Assemblymen Gary Guear and Anthony Impreveduto cleared a committee of the New Jersey Assembly, Interactive Gaming Council (ICG) reported in March.

Speaking before the Assembly Tourism and Gaming Committee, Impreveduto said, '"Internet gambling is not coming, it's here." According to his testimony, the sponsors of the legislation want to make sure that citizens are protected by proper regulation of this activity, and that avenues of potential tax revenue are explored.'

Britain is also moving towards legalizing Internet gambling. Rick Smith, executive director of the ICG, which is located in Victoria B.C., Canada, praised the United Kingdom in March for its major reform of regulated gaming.

According to the IGC, "plans call for Britain to license online gaming operators who locate their servers there. The process will include a thorough investigation of the operators' backgrounds and testing of their hardware and software. Gaming Web sites will be strictly monitored to protect players, prevent money laundering and prohibit minors from gambling at the sites."

Peter Dean, chairman of the Gaming Board for Great Britain, addressed members of the IGC at their meeting in London in February. He indicated that a package of gaming regulation reforms - including the full legalization and regulation of interactive gaming - should be enacted next year, with implementation in 2005.

Although Britain's broadband availability trails many other European countries, the United Kingdom could lead Europe in online consumer revenue by 2005 thanks to its relaxed attitude toward Net gambling, Peter Judge reported for CNET in December 2001.

According to research from Schema Consulting, $38 billion will be spent on online entertainment in Europe in 2005 and online gambling will be the largest industry. "The United Kingdom will take 35 percent of the overall spending, said Schema President David Brown, because it is more accepting of gambling, and other countries are more likely to have laws restricting it," Judge reported.

"British leaders understand the importance and the value of regulating this relatively new means of gaming, I only wish the U.S. government would take such an enlightened approach, instead of futilely attempting to block a form of entertainment that millions of its citizens enjoy," Smith said.

If Internet gambling was regulated in the US, Cohen believes that Internet wagering companies would be willing to cooperate with federal regulators by helping to combat money laundering, suspected game-fixing, underage gambling and attempts by individuals to avoid paying taxes on winnings, Kanigher reported.

Countries where online gambling is legal take exception with the fact the US is attempting to outlaw it. Antigua and Barbuda recently announced their intention to bring the United States before the World Trade Organisation (WTO) over its anti-Internet gambling stance and what is sees as interference in its economic development, reported Glen Shapiro of Law And Tax-News.com in March.

Shapiro quoted Antiguan Prime Minister, Lester Bird as saying, "'America is the largest gambling country in the world so how can they then be so unctuously self-righteous, to use their power to destroy the niches that we are having, trying to develop some kind of diversification in our economy. It is unfair and therefore we are going to take them before the WTO.'"

In March Mark Berniker of InternetNews.com reported Antigua has more than 100 licensed online casino operators, which generate millions of dollars every year for the Antiguan government. "Antigua, for its part, says that with the downturn in the tourism industry, the country has come to rely on revenues generated from licensing and taxing of online casinos on its territory. The online betting industry employs 3,000 people in Antigua, and officials say the U.S. would be in violation to its commitments under the WTO's commercial services agreement."

As was stated at the beginning of this article, the issues involved in online gambling are a lot more complicated today. Every year a different twist is added to the Internet mix and nothing ever stays the same for very long.

If you remember six years ago when Sen. Jon Kyl (R-Ariz) first introduced his bill, everyone was heading down under. Why? Because in Australia Internet gambling was legal.