United States v. Harry Gordon, United States of America v. Frank Rosenthal

The district court dismissed the indictment in these two cases on the ground that licensed Nevada bookmakers and their employees do not engage in an “illegal gambling business,” within the meaning of 18 U.S.C. § 1955 , by violating non-penal regulations of the Nevada Gaming Commission. We agree and affirm the district court’s decision.

18 U.S.C. § 1955 reads in pertinent part as follows:

These two cases hinge on the construction of the phrase, “the law of a State.” Relying on United States v. Howard, 352 U.S. 212 , 77 S.Ct. 303 , 1 L.Ed.2d 261 (1957), the government’s basic position is that a business may be a violation of “the law of a State,” within the meaning of § 1955, without being a violation of the State’s criminal laws. The government’s reliance on United States v. Howard, supra, is misplaced. In How ard a violation of the applicable regulation of the Florida Game Commission was punishable as a crime. Here a violation of the applicable Nevada Gaming Commission regulation can lead only to civil sanctions.

As used in § 1955, the pivotal words, “the law of a State,” suffer from ambiguity. Those words can reasonably be construed to cover gambling businesses that are only…