From: Damaged Justice <frogfarm@yakko.cs.wmich.edu>
Date: Tue, 12 Aug 1997 19:27:43 +0800
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   [6][Back] He Tries to Draw Legal Borders in Cyberspace
   by [7]Matt Richtel 
   5:04am  11.Aug.97.PDT In one of the first undercover stings ever run
   on the Internet, Missouri Attorney General Jeremiah "Jay" Nixon in
   late June handed an 18-year-old intern a credit card and sat her down
   in front of a computer terminal. According to court records, the
   intern visited the World Wide Web site of [8]Hog's Head Beer Cellars
   of Greensboro, North Carolina. She succeeded in ordering a 12-pack of
   microbrews, which were duly delivered.
   
   Then Nixon swung into action. He filed a lawsuit against Hog's Head,
   alleging that the company had not asked for a driver's license number
   from the intern or taken other steps to prevent a minor from
   purchasing alcohol.
   
   "There was no mention on the Web site that you have to be of age,"
   Nixon said. "It's safe to say that any establishment in the state of
   Missouri [that similarly served drinks to minors] would lose their
   license."
   
   Co-owner Jim Lowe concedes that Hog's Head lacked an age-checking
   mechanism when Nixon sicced the minor on him, and says that
   shortcoming has been remedied by requiring customers to fax a signed
   waiver form and copy of their drivers' license to get an order
   processed.
   
   Protecting sovereignty, defining borders
   
   Nixon's beef is not, however, merely about selling alcohol to minors.
   He speaks of protecting the sovereignty of states and of maintaining
   order in the increasingly borderless world created by the Net. His
   targets say, not surprisingly, that he has another agenda, too: waving
   the flag of supposed cyberspace lawlessness to win votes for his 1998
   US Senate campaign.
   
   "He's using this as a political springboard," said Lowe. "People are
   emailing us saying: Doesn't the AG have anything better to do than
   surf the Internet?"
   
   Over the past three months, Nixon has made an increasingly visible
   effort to crack down on what he alleges are illegal businesses run by
   Web-based firms. He has twice sued online gambling businesses, in one
   case winning a fine.
   
   Nixon said that he has taken a tough stand on the issues, particularly
   in the case of Internet gaming, because the federal government has
   dropped the ball on regulation.
   
   "We're going to have to, as 50 different states, get very, very active
   that the protections afforded our constituents continue," Nixon said,
   adding that in the case of gaming, "The federal government has
   basically been AWOL."
   
   Interference with commerce?
   
   Legal entanglements aside, Lowe said he has a bigger problem with
   Nixon's approach.
   
   Instead of trying to clarify how the law might operate in cyberspace,
   Nixon is actually interfering with Internet-based commerce. And Lowe
   numbers himself among the growing number of merchants that feel they
   need the Internet to compete.
   
   Meanwhile, Nixon finds himself fighting perhaps more visible cases
   with two gaming businesses on the Internet. In April, he filed a
   lawsuit against Interactive Gaming & Communications Corp., accusing
   the Pennsylvania company of setting up a casino that violates Missouri
   gaming laws and fails to caution citizens of the Show Me state that
   what the site promotes is against the law.
   
   Nixon won an initial victory in May, when a court ordered Interactive
   Gaming to pay $66,050 in penalties and costs. Nixon said the firm
   refused to pay or to back down. So in June, he asked the grand jury in
   Springfield to indict Interactive Gaming president Michael Simone. In
   what is believed to be the first criminal indictment of its kind in
   the nation, the grand jury handed down a charge of promoting gambling
   in the first degree, a Missouri Class D felony that could carry a
   five-year prison sentence and $5,000 fine for Simone and a $10,000
   fine for his company.
   
   Interactive Gaming's attorney, Lawrence Elliott Hirsch of
   Philadelphia, said in a statement that Missouri has no jurisdiction
   over them. "Michael Simone has never set foot within the state of
   Pennsylvania," said Hirsch. "Mr. Nixon should not be permitted to be a
   super-regulator/legislator of activities conducted lawfully on the
   Internet."
   
   Nixon's response was cool. "Missouri law makes only narrow exception
   for legal gambling, and the Internet is not one of those exceptions,"
   he said.
   
   Battling a tribal lottery
   
   Nixon is also embroiled in a dispute with Idaho's Coeur d'Alene
   Indians. Early this summer, he filed suit to prevent the tribe from
   offering its Web-based US Lottery game in Missouri. As in the
   Interactive Gaming case, Nixon alleges that the Coeur d'Alene are
   violating Missouri law - this time because they have not received
   permission to operate a lottery.
   
   Uncertainty about who really has jurisdiction over Indian gambling
   complicates the case. The 1988 federal Indian Gaming Regulatory Act
   permits tribes to establish casinos on their land, with the permission
   of their home-state governments. The Coeur d'Alene argue that since
   they have permission from Idaho, and since the Net lottery is run
   exclusively on their land, they should be able to offer it anywhere
   they please.
   
   "All the gaming is happening on Indian land - the server is there, the
   random drawing is there, the game itself is played there, the customer
   service is there, the cash account is there," said Mike Yacenda,
   president of Unistar Entertainment, a Connecticut company that manages
   the Coeur d'Alene lottery. "This is the only legal lottery site on the
   Internet."
   
   David Matheson, chief executive officer for gaming for the Coeur
   d'Alene, accuses Missouri of trying to keep the tribe down. "You can
   stand in their lines and buy their lottery tickets," he said. "They're
   trying to make us a poster child for their political games."
   
   The legal nature of the Net
   
   Nixon's stance on the Coeur d'Alene puts him at odds with the many who
   argue that efforts to legislate Net activity - whether the subject is
   gambling, pornography, spam, or taxation - is doomed to failure
   because of the network's diffuse global nature.
   
   But the attorney general doesn't buy any of that. He said there's a
   big difference between Missouri's legal gaming, such as on riverboats,
   and the intrusions from the outside. He argues that Internet-based
   casinos are merely trying to excuse unregulated activity on the
   specious basis that technology makes everything different. Or that
   when an activity is legal in one area - for example, a reservation -
   it should be universally legal because of the Internet.
   
   Nixon said if that's the case, other states or countries will use the
   Net to import activities or substances that are illegal in Missouri
   but legal in their place of origin. That gets to what Nixon said is
   his larger point: Some Internet businesses are threatening Missouri's
   sovereignty and someone needs to "draw a line."
   
   "If we don't draw these lines," he said, "then there are no lines."
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   [17]Info Watchdogs Challenge FBI Wiretap Plan
   [18]Amid Cycling Uproar, Evidence Goes Online
   [19]He Tries to Draw Legal Borders in Cyberspace
   [20]ACLU: Labeling May Lead to Lost Liberty
   [21]Scans: Spinning the FCC
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References

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   2. LYNXIMGMAP:http://www.wired.com/news/news/politics/story/5881.html#nav1.map
   3. http://www.hotwired.com/cgi-bin/redirect/10010/http://stocks.wired.com/
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   6. http://www.wired.com/news/news/top_stories/
   7. mailto:matrichtel@aol.com
   8. http://www.hogshead.com/index.htm
   9. http://www.hotwired.com/cgi-bin/redirect/10018/http://www.wired.com/newbot/
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  14. http://www.wired.com/wired/full.copyright.html
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  16. http://www.wired.com/event.ng?Type=click&ProfileID=26&RunID=28&AdID=464&Redirect=http:%2F%2Fwww.oracle.com%2Fst
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