Online Gambling: More Trouble for Jay Cohen?

Written by:
Thomas Somach
Published on:
Dec/18/2009

Federal authorities in the USA are considering whether to recharge Internet gambling pioneer Jay Cohen with running an illegal online sports betting operation, after Cohen appeared on TV this week and admitted he is back in the online sports betting business again.

Cohen, 44, a former stockbroker from San Francisco, and a partner co-founded Antigua-based online sports wagering site World Sports Exchange (www.wsex.com) in 1997. In 1998, Cohen and 20 others were charged with a variety of criminal offenses by the U.S. Justice Department for operating several unlawful online gambling sites.

Cohen was the only one of the so-called "Internet 21" to return to the U.S. and fight the charges in court. He had a jury trial in Federal court in 2000, which he lost, and was sentenced to 24 months in Federal prison. He appealed and lost and started serving time in 2002. He was released in 2004 after serving 17 months and some time between then and now he returned to Antigua to resume helping run World Sports Exchange.

As per the terms of his release from prison, however, Cohen had to promise the Feds and the court that he would not return to the online gambling business.

On Wednesday night on the Consumer News and Business Channel (CNBC for short), an American cable TV network seen around the world, a special one-hour report aired that was titled "CNBC Investigates: The Big Business of Illegal Gambling."

Among others, Cohen was interviewed for the show, appearing on television for the first time since his release from prison.

It was revealed on the show for the first time publicly--though industry insiders have known about for a while--that Cohen had returned to World Sports Exchange in Antgua, in direct violation of the order issued by the court and Federal officials.

Cohen was last seen on TV years ago, on "60 Minutes," before his imprisonment. Wednesday on CNBC, Cohen's appearance was shocking. Cohen literally looked like Elvis Presley shortly before death--fat, bloated, jowled, haggard, old, grey, tired, weary, listless, worn out and beaten down. Prison will do that to you, and it was obvious the inmate experience had taken its toll on Cohen, despite his being in a tropical paradise now and out of the can for five years.

"I'm staying in Antigua forever," Cohen declared on the show.

Nevertheless, a source in the U.S. Attorney's Office for the Southern District of New York, which originally prosecuted Cohen, told Gambling911.com that it is possible the Feds may charge Cohen again, for violating the terms of his release from prison by reengaging in Internet gambling.

"Nothing has been ruled in or ruled out" as far as Cohen is concerned, the source told Gambling911.com. The Feds are looking into the matter, the source said, and will soon make a decision on how to handle it.

Expect the U.S. Attorney's Office for the Southern District of New York to issue a statement about the matter, possibly as soon as next week, the source said.

Meanwhile, a longtime observer of the Internet gambling industry tells Gambling911.com: "I wouldn't be at all surprised if the Feds go after Cohen again. They don't like to be humiliated publicly, which Cohen did by going on TV from Antigua. It's like he has to rub his finger in their eye and say look at me!"

"And don't think it won't happen because the U.S. has a Democratic President now. When Cohen was originally charged, Clinton was President."

"And remember how that went down. Cohen was interviewed by Sports Illustrated, bragging about World Sports Exchange and how the Feds couldn't touch him offshore. A few weeks later, the Feds busted him. Now he's shooting off his damn mouth again."

Tom Somach, Gambling911.com tomsomach@yahoo.com

 

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