In February 2011, Robert Stuart and his wife were confronted by authorities at their Arizona home with potential charges ranging from money laundering and operating an illegal enterprise to engaging in the promotion of gambling. The potential charges stemmed from Mr. Stuart’s software, called Action Sportsbook International (ASI), which provides infrastructure for online casinos and sportsbooks to run betting operations.
While opinions regarding whether certain forms of gambling are illegal appear to be changing, it is still illegal in New York to operate an online sportsbook or horse racing betting business. It is also illegal in New York to aid and abet someone in the operation of such an illegal gambling business.
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New York authorities say that about $2.3 million that Robert Stuart and his company, Extension Software, received in cash and money orders for licensing his software constitutes direct proceeds of illegal, U.S.-based bookmaking operations.
Stuart asserts that New York authorities only came after him because they wanted to use him as a conduit to uncover illegal gambling operations in that state. He says the New York district attorney’s office tried to strong-arm him into a plea agreement that would have had him hacking into the systems of his software clients in order to obtain the usernames and passwords of gamblers and their bookmakers to help authorities gather evidence of illegal gambling.
*Case Update: The Blanch Law Firm was able to get all charged dismissed*