Gambling Sites Declared Off Limits to Hoosiers

10 July 1998

Indiana Attorney General Jeff Modisett sent over 180 emails to several dozen gambling-related websites asking administrators to inform visitors accessing the Net from Indiana that they're breaking the law. Here's a copy of the original email and the opinion letter:

Subject: Notice: Internet Gambling is Unlawful in Indiana

Jeff Modisett
Attorney General of Indiana
Indiana Government Center South
Fifth Floor
402 West Washington Street
Indianapolis, IN 46204

July 8, 1998

Dear Internet Gambling Operator:

We have identified you as an entity that provides or promotes gambling services to persons over the internet. Specifically, you solicit persons who view your internet web site to engage in on-line gambling. This letter is to inform you that it is illegal for Indiana residents to gamble over the internet and it is also illegal for you to promote and engage in gambling with Indiana residents. And, although it is illegal for all Indiana residents to gamble over the internet, I am particularly concerned that your services may be especially enticing to minors.

If you are promoting or conducting gambling operations with Indiana residents, I demand that you cease those activities immediately.

If you are informing Indiana residents that it is lawful for them to gamble via the internet with your service or other services, I demand that you stop providing that information immediately because it is false.

If you are not taking reasonable steps to determine the residence of persons with whom you engage in gambling, I request that you take such steps.

If you are not taking reasonable steps to determine whether persons with whom you engage in gambling are adults, I request that you take such steps.

I further request that you place a conspicuous notice in a place reasonably calculated to be seen by persons finding your web site to the effect, "NOTICE TO INDIANA RESIDENTS: WE HAVE BEEN ADVISED THAT IT IS ILLEGAL FOR YOU TO USE OUR SERVICES OR OTHERWISE TO GAMBLE OVER THE INTERNET."

For a copy of my official legal opinion that internet gambling is illegal in Indiana, please contact my office.


Jeff Modisett
Attorney General of Indiana

Those who wish to express their feelings on Attorney General Modisett's statements can contact his office via email form at or telephone at (317) 232 - 6201. To contact the source of the mass email, write to:

Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770

Telephone: (317) 232-6201
July 7, 1998

Stanley G. Jones, Commissioner
Indiana Commission for Higher Education
101 West Ohio Street, Suite 550
Indianapolis, Indiana 46204-1971

Re. Official Opinion #98-8

Dear Commissioner Jones:

This responds to your June 17, 1998 letter, in which you requested my opinion regarding the legality of gambling via the internet. Specifically, you asked, "Whether it is lawful for a person physically located in Indiana to gamble via the internet and whether it is lawful for a person to provide internet gambling services to persons in Indiana." For the reasons discussed below, it is my opinion that it is illegal both for persons to gamble over the internet from Indiana and to provide internet gambling services to persons in Indiana.



In your letter, you note reports that gambling and, to an ever-increasing extent, internet gambling, are becoming serious problems on college campuses. Our research reveals that there are now hundreds of providers of internet gambling services ("providers") and suggests that youth and college students are likely to be among the most prolific users of those services.1 These services include sports betting, lotteries, and "virtual casinos"— the computer equivalent of slot machines, card games, and dice games found in actual casinos. Although providers offer various arrangements, it is typical for a customer to open an on-line account with a credit card and begin gambling immediately. While providers' representations about the legality of their services vary, some have stated expressly that customers may use the services lawfully.2

A. Gambling generally

The legality of internet gambling in Indiana hinges on the interpretation of State statutes regulating gambling generally. Many forms of gambling are now legal in Indiana, including riverboat gambling, pari-mutuel wagering on horse races (including off-track betting), charitable gambling, and the State lottery. See IND. CODE §§ 4-30-1-1 et seq. (Indiana State Lottery); 4-3 1-1-1 et seq. (pari-mutuel wagering on horse races); 4-32-1-1 et seq. (charitable gambling); 4-33-1-1 et seq. (riverboat gambling). For these expressly legal forms of gambling to be conducted over the internet, at a minimum, approval from the appropriate regulatory agencies would be needed. Cf. 71 IAC 11-1-1 through 12-2-15 (Indiana Horse Racing Commissions s rules governing satellite facility permit application and simulcasting). Currently, no Indiana State agencies have authorized internet gambling. 3

Indiana law criminalizes gambling not otherwise specifically permitted by law. See IND. CODE §§ 3 5-45-5-1 through 35-45-5-10; American Legion Post # 113 v. State, 656 N.E.2d 1190, 1992 (Ind. Ct. App. 1996); see also id. at 1194 (making clear that General Assembly has power to permit some types of gambling while outlawing others). Because non-regulated gambling is not expressly permitted by law, it is a criminal act for both parties to a gambling transaction, the provider and user.

B. Internet gambling

The internet is a new and somewhat intangible communications medium.4 Thus, some may believe the internet is beyond regulation by gambling statutes enacted before the internet came into being. A perceived jurisdictional problem adds to the view of some that internet gambling is not illegal under existing law. Some have argued, for example, that no one is really sure, electronically or philosophically, where the gambling transaction occurs -- that it could be where the bet is placed, where it is received, or in "cyberspace."

It is inescapable, however, that an internet-gambling Hoosier -- sitting at her computer, her feet firmly planted on Indiana soil, and her credit-card number close at hand -- is doing the things necessary to gamble unlawfully in Indiana. For that Hoosier to gamble over the internet from her home, office, or favorite tavern is not legally or practically different from wagering over the telephone. That is true even if the person (or computer) taking the bet is in an exotic location. See Playboy Enterprises, Inc. v. Chuckleberry Pub. Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996) (rejecting notion that U.S. resident accessing company's internet home page "traveled" to Italy when he did so).5

In the terms of controlling Indiana statutes, the person gambling over the internet is "knowingly or intentionally" "risking money... upon lot, chance, or the operation of a gambling device[.]" IND. CODE §§ 35-45-5-1, 35-45-5-2. A person betting on sporting or other events over the internet is risking money based on chance just as if she made the bet with her "bookie" over the telephone.

Moreover, for the various "virtual" card games, slot machines, and other games of chance, the internet is a "gambling device" under the Indiana Code for several reasons. For example, the internet may function as a "mechanism" that offers "a right to money or other property... in return for [a bet based on] an element of chance[.]" IND. CODE § 35-45-5-1. The internet also could be a "mechanism... construction, or installation designed primarily for use in connection with professional gambling" if it is used for gambling including bookmaking, lotteries, or games of chance. Id. §§ 35-45-5-1, 35-45-5-3; see L.E. Services, Inc. v. State Lottery Comm., 646 N.E.2d 334, 342 (Ind. Ct. App. 1995) (computer software and hardware, including modem used to transmit information related to purchase of out-of-state lottery tickets, were gambling devices) The perceived "intangible" nature of the internet does not detract from its illegal use as a gambling device. Cf. B.P.O.E. # 576, Elks Club v. State, 413 N.E.2d 660, 664-65 (Ind. Ct. App. 1980) (State not required to show that slot machine was operational; jury could use common sense regarding nature of gambling to conclude how machine worked).

There are several potential violations committed by a provider that engages in bookmaking or offers games of chance via the internet. The provider wagers on the outcome of its customers' bets and is thus risking money for gain based on lot or chance. IND. CODE § 3 5-45-5-1. Therefore, the provider is committing "unlawful gambling." Id. § 35-45-5-2. Providers also may commit "professional gambling," a Class D felony, by engaging in bookmaking; conducting numbers games; conducting banking games played with electronic cards, dice, and counters; and/or by accepting, or offering to accept for profit, money risked in gambling. Id. § 35-45-5-3. In addition, a provider that transmits or receives gambling information before an event or maintains equipment for such transmission or receipt commits the offense of "promoting professional gambling," a Class D felony. Id. § 35-45-5-4(a).


It appears that many -- perhaps even most -- providers base their operations outside the United States. Thus, providers have argued that they are not subject to the jurisdiction of courts in states attempting to regulate their activities. At least one court confronting this jurisdictional issue has found that personal jurisdiction existed where the provider solicited and received wagers from residents in its state. See State of Minnesota v. Granite Gate Resorts, Inc., 568 N.W.2d 715, 721 (Minn. Ct. App. 1997), review granted. Granite Gate is consistent with other decisions finding internet communications sufficient to establish personal jurisdiction. See Maritz, Inc. v. Cybergold. Inc., 947 F. Supp. 1328 (E.D. Mo. 1996) (personal jurisdiction existed where non-resident defendant tortiously injured state resident via internet); Zippo Mfg. Co. v. Zippo Dot Corn, Inc. 952 F. Supp. 1119 (W.D. Pa. 1997) (personal jurisdiction existed where non-resident corporation targeted potential customers from any location, even though potential resident customers were not targeted specifically); see also Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996) (internet solicitation was of sufficient repetitive nature to satisfy state long-arm jurisdiction statute); see generally Hearst Corp. v. Goldberger, 1997 WL 97097, *1-6, 7-15 & n.1 (S.D.N.Y. Feb. 26, 1997) (discussing personal jurisdiction established by internet communications and collecting eases involving internet).

Indiana's long-arm jurisdiction statute has been construed to extend to the limit of the Fourteenth Amendment's Due Process Clause. See Torborg v. Ft. Wayne Cardiology, Inc., 671 N.E.2d 947, 949 (Ind. Ct. App. 1996). Thus, when a provider seeks to transact its business over the internet by soliciting and accepting wagers from Hoosiers, it submits itself to personal jurisdiction in Indiana courts. See Weber v. Jolly Hotels, 977 F. Supp. 327, 333 (D.N.J. 1997) (where entity actively conducts business over internet, personal jurisdiction over entity exists in jurisdiction where long-arm statute is coextensive with constitutional limits). 6


When a person physically located in Indiana wagers over the internet, both the persons making and taking the bet violate Indiana criminal law.


Jeff Modisett
Attorney General
State of Indiana

1See Howard Shaffer et al., Estimating the Prevalence of Disordered Gambling Behavior in the United States and Canada: A Meta-analysis, Harvard Medical School Division on Addictions (Dccember 15, 1997), at 87 (""Adolescents and college students have higher rates of level 3 gambling [severe problem gambling] than adults in the general population."). There also has been some in4epth media reporting on internet gambling recently. See, e.g., "Betting Without Borders: The Odds of Stopping Gambling on the Internet," ABCs Nightline (April 7, 1998), reprinted in 1998 WL 5373021. In addition, the U.S. Congress heard testimony during the past two sessions about the proliferation-of internet gambling, especially among young people. See, e.g., Proceedings before the Judiciary Committee of the U.S. House of Representatives. 144 Cong. Rec. D56-01, 105th Cong., 2d Sess. (February 4, 1998), reprinted in 1998 WL 8991721; Proceedings before the Judiciary Committee oft/ic U.S. Senate, 143 Cong. Rec. D835-02, 105th Cong., 1st Sess. (July 28, 1997), reprinted in 1997 WL 11235330.

2 In addition to the criminal laws discussed in this opinion, a provider making misrepresentations about the legality of its services may also violate Indiana's consumer protection laws. See generally IND. CODE ch. 24-5-0.5. Moreover, some providers have established gambling accounts and operations in the form of a "game" with redeemable "prizes." These services too may violate Indiana's gambling laws.

3 Although the Hoosier Lottery refers on its web site to "on-line" games, it expressly notes that "on-line" in that context means games for which tickets may be purchased from participating retailers -- not games conducted over the internet.

4 For a detailed discussion of the nature of the internet, see generally American Civil Liberties Union v. Reno, 929 F. Supp. 824, 830-49 (E.D. Pa. 1996), aff'd, 117 S. Ct. 2329 (1997).

5 Because access to the internet often involves use of interstate telephone wires, gambling over the internet -- especially sports betting -- may violate federal law as well. See 18 U.S.C. § 1084(a). Earlier this year' a federal grand jury in New York returned indictments against fourteen people allegedly associated with an internet sports-betting operation. U.S. Senator Jon Kyl of Arizona has introduced a bill in the last two sessions of Congress that would expressly prohibit internet gambling under federal law. See S. 474, 105th Cong., 1st Sess. (1997).

6 As an additional contact, many providers advertise their services on commercial web sites whose servers appear to be located in the United States.