In a landmark decision by the US Courts last week, a co-owner of an internet gambling site based in the Caribbean was sentenced to 21 months in jail.

The case against Jay Cohen of World Sports Exchange is one of a series against operators of offshore gambling web-sites being brought under the US's Wire Wager Act and it is a salutary reminder to all web-site operators of the need to comply with international laws. After a 2 week trial, a federal jury found that although Mr. Cohen's business was based offshore he was nevertheless committing a criminal offence in the US by using telephone lines to conduct a gambling business across state/federal borders.

In Hong Kong, the Gambling Ordinance prohibits most forms of gambling, and both operators of gambling web-sites and users of such sites risk falling foul of this legislation. For example, a press conference promoting an overseas gambling web-site scheduled to be held in February this year, was cancelled after the organiser of the conference was warned that his actions may give rise to criminal liability under the Gambling Ordinance. However, for the time being at least, the Hong Kong Police have stopped short of pursuing operators of gambling web-sites based overseas or individuals based in Hong Kong who gamble over the internet.

This position may change in the future as the Government seeks to tighten up legislation which it sees as outdated, including to outlaw expressly the promotion of overseas gambling. In this regard, a precedent has already been set by the Crimes (Amendment) Bill, published in June 1999, which purports to extend the jurisdiction of the Hong Kong courts overseas. In the event that this Bill comes into force it will provide the Hong Kong Police with statutory authority to take action in respect of certain sexual offences committed outside Hong Kong which would not otherwise be actionable in Hong Kong.

In any event, following precedent cases in the UK (which have persuasive value in Hong Kong), it appears clear that web-site operators can incur liability in Hong Kong in relation to materials which they upload onto the internet from a server located overseas. In this regard, there is every reason to suppose that the courts in Hong Kong would be willing to apply the laws of Hong Kong to the contents of any web-site which is accessible in Hong Kong.

Accordingly, if the contents of such a web-site is unlawful under Hong Kong law (for example, it includes a defamatory statement or a copy of a photograph which infringes copyright), then the operator of that site risks being sued before the Hong Kong courts even if he is based overseas. Provided that the law of the jurisdiction in which that operator is based recognises judgments of the Hong Kong courts, then any award of damages granted by the courts in Hong Kong could then be enforced against that operator. Alternatively, the operator of the site may find himself subject to an enforcement action on his next visit to Hong Kong.

Clearly, it is unfeasible for operators of web-sites to check every aspect of their sites to ensure compliance with the laws of every jurisdiction. However, it can pay to think ahead and make appropriate checks in overseas jurisdictions if you think that the contents of your site may breach relevant laws - just ask Mr. Cohen.

Written by Rob Deans. Published in SCMP Technology Post on 22 August 2000.