Yesterday Anurag Dikshit, co-founder of the Gibraltar-based online gambling company PartyGaming, pleaded guility to violating the U.S. Wire Act and agreed to forfeit $300 million to settle criminal charges against him for helping Americans play games of chance from the comfort of their homes. Dikshit's sentencing is officially scheduled for two years from now, and it seems unlikely that he will serve any time. PartyGaming, a publicly traded company that offers poker, casino games, and bingo, stopped serving the U.S. market after Congress passed the Unlawful Internet Gambling Enforcement Act of 2006. Even in admitting his guilt, Dikshit alluded to the arbitrariness and vagueness of U.S. gambling laws, especially as applied to foreign companies that are perfectly legal in the countries where they operate:
I came to believe there was a high probability that the company's business was illegal under US laws. I acknowledge my actions and have come to believe that what I did was wrong.
Doesn't the rule of law require something more than the possibility of gradually realizing, after operating a business for years, that you are probably committing a crime?
Former BetOnSports CEO David Carruthers, meanwhile, is still awaiting trial in St. Louis. He could face up to 20 years in prison.
Rep. Robert Wexler (D-Fla.), chairman of the Europe subcommittee of the House Foreign Affairs Committee, responded to Dikshit's guilty plea by urging the legalization of online gambling:
It is of critical importance that we find an effective and immediate way to regulate and tax internet gaming in order to avoid a serious trade dispute with the E.U., which, in turn, could have global trade repercussions for the United States. The retroactive and discriminatory enforcement against E.U. parties, who ceased operating in the U.S. a long time ago, has directly led to an escalating trade dispute with the E.U.
I chronicled the federal government's crackdown on online gambling in the June issue of reason.