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As if it were not bad enough that the United States passed protectionist laws to weed out competition from off shore online casinos, it now appears that some state governments in the United States may be extorting money from online casinos with threats of prosecution.

In a recent press release, Acting United States Attorney for the Southern District of New York, Lev L. Dassin, open brags of how his office was able to squeeze $105 million out of the Gibraltar based online gambling company PartyGaming.  PartyGaming apparently agreed to pay the hefty fee in an effort to avoid be prosecuted for offering services to customers in the United States. 

The problem with the prosecution, or the threats there of, is that PartyGaming was offering services over the Internet that is completely legal in the country which they are based.  In addition to that their services, online casinos and other forms of Internet gambling, were likely legal in the United States during the time which the services were offered.

According to the press release the basis of the prosecution is as follows:

“PartyGaming offers a variety of web-based real-money and free-play games including, for example, real-money poker and casino gambling. However, Internet real-money gambling is not legal in the U.S. Nonetheless, PartyGaming offered Internet gaming to players in the U.S. from 1997 until October 13, 2006.” 

There is a time issue with the allegations.  The Unlawful Internet Gambling Enforcement Act was passed in October of 2006.  At this time PartyGaming and many other online casinos withdrew from the United States market.  Prior to the passage of that law there was no legislation outlawing online casinos.

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