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Bet365 was recently mentioned in the affidavits supporting a criminal complaint filed against two individuals in the United States District Court for the Northern District of New York who are accused of money laundering connected with an Internet gambling operation. Bet365 was not named as a defendant, but the question remains; can a non-U.S. facing site be at risk for prosecution as a result of customers who obtain access to their sites through masked IP addresses?
The defendants in this case were alleged to have discussed Bet365 in conversations about transferring money to bank accounts abroad.
Non-U.S. facing sports books use technology such as geo-blocking to prevent U.S. customers from accessing their sites. This is an attempt to prevent individuals in the U.S., where interstate online sports betting is prohibited under federal law, from accessing their sites to place bets on sporting events.
However, the geo-blocking technology can be circumvented by individuals that mask their IP addresses. Since the IP address can be masked, companies cannot say with complete certainty that their websites are not being accessed from the U.S. The only way for these companies to say with complete certainty that their sites are not being accessed by resourceful individuals in the U.S. is to completely shut down, an absurd proposition.
Non-U.S. facing sports books should not be subject to criminal liability in the U.S. These sites have extensive controls in place to prohibit bettors in the U.S. from accessing the sites and should not face liability because an individual was successfully able to circumvent these controls. Prosecutors at both the state and federal level have been aggressive recently in prosecuting offshore sports books and it will be worth monitoring in the future if prosecutors will decide to pursue charges against non-U.S. facing sports books for action taken by individuals in the U.S. that masked their IP addresses.
- Jeff Ifrah runs Ifrah Law and this is a Special Contribution to the Gambling911.com website
