Gambling Operations

The Wire Act (18 U.S.C. Section 1084) is the primary weapon used by the federal government to prosecute sports betting and online gaming. It prohibits the use of wire communication facilities to transmit bets or wagers in interstate or foreign commerce.

The interpretation of this statute is heavily litigated. We argue that the Wire Act applies strictly to sports betting and does not extend to other forms of online gaming such as poker or lotteries based on recent judicial opinions. However, the government frequently attempts to expand its scope. We meticulously analyze the routing of data packets. If the server and the bettor are in the same state, we argue that the transaction did not cross state lines and therefore federal jurisdiction under the Wire Act is lacking.

The most critical defense in many gambling operations cases is the argument that the activity is not gambling at all. Most statutes define gambling as wagering on a game of chance. If the outcome depends primarily on the skill of the player, it may not fall under the statutory definition of gambling.

This is the central battlefield for daily fantasy sports, poker and e-sports competitions. We employ statistical experts and game theorists to mathematically prove the dominance of skill elements in the game. By demonstrating that a skilled player will consistently beat an unskilled player over a large sample size, we can often remove the operation from the purview of criminal gambling statutes and classify it as a lawful contest of skill.

Casinos and card clubs are defined as financial institutions under the Bank Secrecy Act. This subjects gambling operations to strict Anti-Money Laundering (AML) requirements. Operators must file Currency Transaction Reports (CTRs) for transactions over ten thousand dollars and Suspicious Activity Reports (SARs) for any activity that suggests money laundering.

The failure to maintain an effective AML program is a criminal offense. We design and implement robust compliance programs that meet federal standards. We train staff on how to identify structuring (where a player tries to keep transactions under the reporting threshold) and how to document the source of funds for high rollers. This proactive compliance creates a shield against federal enforcement actions.

Title 31 of the Code of Federal Regulations governs the specific reporting obligations of casinos. The IRS conducts periodic audits to ensure compliance. A failed audit can lead to massive civil fines and can jeopardize the gaming license.

We represent clients during these audits. We ensure that all logbooks, surveillance records and player rating systems are in order. If the IRS identifies deficiencies, we negotiate remediation plans to avoid punitive sanctions. We argue that any lapses were administrative errors rather than systemic failures or willful blindness to money laundering activities.

The requirement that five or more persons were involved in the operation is a frequent point of contention. The government attempts to count everyone from the owner to the bartender and the janitor to reach the statutory minimum.

We argue that independent contractors, mere bettors and individuals performing functions unrelated to the gambling activity cannot be counted. By whittling down the number of participants below five, we can defeat the federal charge entirely. We carefully analyze the organizational chart to prove that the enterprise lacked the necessary headcount to qualify as a federal illegal gambling business.

The government must prove that the operation was continuous for more than thirty days. We scrutinize the timeline of the investigation. If the operation was sporadic or if there were significant breaks in activity, the statute is not satisfied.

We use surveillance logs and undercover reports to construct a timeline that contradicts the government’s narrative. If we can show that the game was an occasional event rather than a continuous business, the conduct may still be a state misdemeanor but it is not a federal felony. This distinction is vital for avoiding prison time and asset forfeiture.

Financial transactions are the lifeblood of online gambling operations. The government often targets payment processors to choke off the flow of funds to gaming sites. They seize bank accounts and indict processors for conspiracy to commit bank fraud.

We represent operators and processors in these disputes. The rise of cryptocurrency adds another layer of complexity. We defend against allegations that the use of Bitcoin or other digital assets was intended to conceal the nature of the transaction. We argue that the use of crypto is a legitimate business choice for efficiency and privacy rather than evidence of criminal intent to evade banking regulations.

In the world of sweepstakes cafes and gray market gaming machines, the legality often turns on the software code. Pre-reveal games claim to show the player the outcome of the game before they wager, thereby removing the element of chance.

Prosecutors view these as slot machines in disguise. We bring in software engineers to testify about the mechanics of the code. We argue that because the player has the option to decline a losing play without wagering, the game does not constitute gambling under the statutory definition. This technical defense protects software developers and distributors from being treated as criminal racketeers.

Civil forfeiture allows the government to sue the property itself. The burden of proof is lower than in a criminal case. We file immediate claims to contest these seizures.

We must prove that the assets were not the proceeds of illegal activity or that the owner was an innocent owner who lacked knowledge of the illegal conduct. For example, if a landlord owns a building where a tenant was running a poker room, we argue that the landlord should not lose the property because they were unaware of the tenant’s criminal acts. We use forensic accounting to trace funds and separate legitimate income from alleged gambling proceeds.

A RICO charge exposes defendants to twenty years in prison and treble damages. Prosecutors use the threat of RICO to force plea bargains. We challenge the existence of the enterprise.

We argue that the defendants were a loose association of individuals rather than a structured criminal organization. We also challenge the predicate acts. If we can defeat the underlying gambling charges, the RICO case collapses. We work to prevent the government from inflating a simple vice crime into a major organized crime prosecution.