New York Court: Server Location Doesn't Determine Jurisdiction

Share this content:
The New York State Supreme Court ruled against World Interactive Gaming Corp.'s claim last month that its online gambling site was not subject to state law since its computer servers were legally based and licensed in the West Indian island nation of Antigua.

"It is irrelevant that Internet gambling is legal in Antigua," said Justice Charles Edward Ramos in his contempt of court order. "The act of entering the bet and transmitting the information from New York via the Internet is adequate to constitute gambling activity within New York state."

"The courts will assert power over any individual worldwide whose design and intent is to obtain money from people living in that court's jurisdiction," said John Steele, Internet attorney at Fenwick & West, Palo Alto, CA. "I call it the open-the-wallet test."

"It doesn't matter where the servers are," concurred Scott Brown, spokesman for New York Attorney General Eliot Spitzer. "It matters where the players are."

Attempts to reach the Bohemia, NY-based company were unsuccessful. The phone number is not listed, and the Web site was no longer in service.

Ramos said in his 20-page ruling that WIGC had broken state and federal laws, including the Federal Interstate Wire Act. The judge said the Web site created a virtual casino in the user's computer terminal.

Spitzer's office began investigating WIGC over a year ago when the company was discovered selling shares in its online gambling casino for $10,000 apiece. An estimated $1.8 million was collected from 114 investors, including 10 from New York.

Ramos also ruled that WIGC violated New York state securities laws by failing to register with the attorney general before selling shares and by not revealing that 46 percent of the investments garnered would be routed toward salaries, commissions and consulting fees to the company's principals.

In March, Spitzer formed an Internet bureau in his office to deal with cases of similar nature. New York is the second state after Pennsylvania to have a stand-alone unit to handle Internet issues.

Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above