Federal Internet Gambling Laws
Internet gambling violates provisions of federal law under 18 U.S.C. § 1084. This section prohibits the foreign or interstate transmission of bets or wagers or information on bets or wagers by use of a wire communication. For example, operating an off-shore sports betting operation that utilizes the telephone system within the United States is illegal, United States v. Blair, 54 F.3d 639 (10th Cir. 1995). As Internet transmissions are conducted over telephone lines, this is a potential area of liability for gambling service providers.
Minnesota Internet Gambling Laws
Internet gambling services are also illegal in Minnesota. Such activities include sporting events, lottery tickets, and simulated casino games. Generally, it is unlawful in Minnesota to sell or transfer a chance to participate in a lottery, Minn. Stat. § 609.755(2). Sports bookmaking is defined as “the activity of intentionally receiving, recording or forwarding within any 30-day period more than five bets, or offers to bet, that total more than $2,500 on any one or more sporting events,” Minn. Stat. § 609.75, Subd. 7.
Engaging in sports bookmaking is a felony. Finally, intentionally receiving, recording, or forwarding bets or offers to bet in lesser amounts is a gross misdemeanor, Minn. Stat. § 609.76, Subd. 1(7).
MN Court of Appeals on Internet Gambling
The Minnesota Court of Appeals upheld jurisdiction against an out of state Internet gambling service provider in State of Minnesota v. Granite Gate Resorts, Inc., 568N.W.2d 715 (Minn. Ct. App. 1997). The Court found that because the provider had advertised on the Internet on-line gambling services and had developed from the Internet a mailing list that included one or more Minnesota residents, the provider had purposefully availed itself of the privilege of conducting commercial activities in Minnesota to an extent that maintenance of an action in Minnesota did not offend traditional notions of fair play and substantial justice. Therefore, the provider was subject to personal jurisdiction in Minnesota.
Individual Bettor Liability
There is also a potential for individual bettor liability in Minnesota. In Minnesota it is unlawful to make a bet through Internet gambling organizations. Minnesota law makes it a misdemeanor to place a bet unless done pursuant to an exempted, state-regulated activity, such as licensed charitable gambling or the state lottery, Minn. Stat. §§ 609.75, Subd. 2 -3; 609.755(1). As Internet gambling organizations are not exempted, any person in Minnesota who places a bet through one of these organizations may be committing a crime. Further, Minnesota law provides for forfeiture provisions related to unlawful gambling activity. It is the Minnesota Attorney General’s position that a computer that is used to play a game of chance for something of value would be subject to forfeiture under Minnesota law. For the Minnesota Attorney General’s position on the legality of gambling, see http://www.jmls.edu/cyber/ docs/minn-ag.html.