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A first for the Industry

The online casino gambling industry has seen an absolute first in the market – federal authorities announced the first actual legal action against a US citizen purely on the grounds of the UIGEA. Federal authorities have previously threatened offshore online casinos with legal action as a result of their involvement in the US industry, and others have been threatened with legal action based on the US Wire Act. As a first though, Massachusetts resident Todd Lyons is facing federal charges for running an illegal internet sports betting site for the US market, Sports Offshore. The internet sports betting industry has been widely accepted as immune to the Wire Act and therefore safe for US companies.

That is not the case within the UIGEA, however, the federal prosecutors are using the UIGEA and the federal Professional and Amateur Sports Protection Act as a basis for his arrest and are looking at pressing the case hard as a way to set a clear and strong precedent in support of the UIGEA’s authority in the online casino gambling market. The fact is, although betting is protected by the Wire Act, the federal prosecutors are right in their assertion that online casino sports betting is clearly illegal under the Sports Protection Act. At this point, Lyons is facing three very serious charges: racketeering, money laundering and operation of an illegal gambling business – each charge faces a sentence of as much as 20 years in prison. Any significant jail time will count as a very strong act of validation for the federal government’s online casino UIGEA prosecution efforts.

At this time, Lyons is out on a $200,000 bail and will appear in court next month for his preliminary proceedings. These charges are incredibly serious and even the most fervent supporters of a regulated and licensed online casino gambling market in the US are skeptical as to whether Lyons claims of his business’ legality will hold up – he claims the fact that it operates offshore precludes him from prosecution.