Betting on Data Collection

Gambling is one of those weird things within the law. On the one hand, it’s a vice, it’s addictive, it’s illegal, and arguably immoral (just ask Pete Rose.) On the other hand, bingo is prevalent at G rated events like church and PTO fundraisers, and raffle tickets and lottery tickets are everywhere. It’s hard to find an office with more than ten employees that doesn’t have some variation on a March Madness bracket. What is absolutely verboten in your home town is fine when you purchase a scratch off at the local gas station, and actively encouraged on cruise ships and in Las Vegas. The World Series of Poker is on ESPN, even though it would likely be illegal if it were held in your hometown.

Most people know when what they are doing is illegal and when it is legal. Internet gambling, however, isn’t as clear. In some countries, it is legal. In this one, for the most part, it isn’t. So when you are using an internet poker program that is based in, say, Costa Rica, where it is legal, from your living room in Brooklyn, where it isn’t, are you committing a crime? Probably. But what about the internet poker people in Costa Rica? Have they violated an American law just because you used their program on American turf? And what about the computer programmers who make it all possible?

We’re about to find out the answer to the last question. The Manhattan DA’s office is prosecuting Robert Stuart, Susanne Stuart, Patrick Read, and Extension Software, Inc. for aiding and abetting illegal gambling and money laundering because they sold some software to companies outside the US that allowed them to create a Sports Book that people used here in the US for nefarious purposes.

Liability questions intrigue me. Think of it this way: if I made a deck of cards that you bought legally and then used in an illegal poker game, am I guilty of conspiring with you? How about if I sold them to you in Las Vegas, where the poker game would not be illegal, and then you took them to New York, where it would be? Really, it is analogous to the lawsuits against gun manufacturers. If you – a fine upstanding citizen -- legally purchase a gun from Glock and then give it to your felonious nephew who then shoots someone, how is that Glock’s fault?

How is this different? Does it matter that there wasn’t much else you could do with this software but use it for betting on sports? Are we in a world that is so global that you have to assume that even though you don’t sell software on American soil that it will be used on American soil? The internet has no national borders, after all.

Extension Software, Inc., and its owners have refused all offers of a plea bargain. Of course, the plea bargain came with strings – they had to include in future versions of the software a sort of spyware that would allow the government to access information on who was using it and in what way. They’ve already been to trial, and the jury was 9-3 in favor of acquittal when the judge declared it deadlocked. They head to trial again in September. Their attorneys at The Blanch Law Firm, are pretty confident that they’ll win. The DA must be confident as well, or it wouldn’t take the time to try the case all over again.

It’s interesting that the Manhattan DA is bothering to try this case again, given the fact that the time and expense taken in the first trial led to a 9-3 deadlocked jury in favor of not guilty, and given the apparent attitude towards New Yorkers when it comes to these things. There is a bill that is currently wending its way through the NY General Assembly in a successful way that would make certain types of sports betting legal.

I wonder what the odds are that the DA will win. Wanna bet?

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