Best of the ISP-Lists

Gambling With the Business

Members of the ISP-Colo list discuss what happens when a client asks you to host an illegal site. The short answer is: Don't do it. But there's more to this question than "just say no."

[April 24, 2001]

On the ISP-Colo list in April, IC asked a seemingly simple question:

"We have an inquiry from someone to host their gambling site. Is this legal for a colo in the US to handle?"

A number of respondents contended that it's best kept outside American borders:

[PM observed] "No gambling sites are legally hosted in the US. Most of them are in Bermuda or the UK."

[WT agreed] "Antigua has embraced online gambling. You can set up a colo facility there and have a good reason to spend time on the islands."

RW explained that the real truth is a little more complicated:

"It is legal to host the site as long as the actual transaction takes place on a server in a jurisdiction that allows Internet gambling. You have to avoid crossing the line between hosting the front end of the casino site and completing the transaction. The actual transaction must take place outside of the US. Check out some of the casino sites and read their affiliate information: they lay it all out for you."

Others suggested accepting the customer, but remaining neutral about the customer's activities:

[EK asked] "Why don't you put the burden onto your prospective customer? Have them provide documentation from their lawyer that it is okay for them to host their systems in your facility. If you're just providing bandwidth and rack space, then it's not up to you; it's up to your customer.

You should not be required to police them. If a tenant in an apartment complex is selling drugs from the apartment, it is not up to the landlord to police the tenant and shut them down."

[DH recalled] "We had a customer that was running an adult site for a while. A few months after we set up their account, we got a phone call from the local district attorney wanting to know who owned the site, their name, address, etc. We declined to provide the information without a court order. They then asked us to shut them down, and again we declined without a court order.

Six months later they served us with an order from the Federal District Court to provide all account information and shut the site down. At this point, we complied completely and without question. The customer got mad that we didn't give them notice, but I told them to talk to the Feds."

A number of others argued that regardless of the specifics, it's just not worth it:

[JW warned] "Don't be surprised to find yourself in front of a Federal Grand Jury. The Department of Justice is currently prosecuting one of the larger online casinos operating out of Antigua. Is it really worthwhile considering a customer with this great a potential for aggravation?"

[AS agreed] "At some point you do have to ask if it is worthwhile. If it makes economic sense, go for it. Otherwise, I suggest sending them to the islands."

[RL added] "If you need the gambling business to stay afloat, then you're in the wrong business. The revenue from space/bandwidth won't equal your legal fees."

[Ed. Note: Also see the Letter to the Editor on this article, available here]

—End