Wyoming’s gambling laws aren’t so vague that a Casper businessman accused of running illegal gambling houses couldn’t have known he was breaking the law, a state prosecutor argues.

Scott Lee Shroefel, 54, was charged in September with engaging in professional gambling, a felony punishable by up to three years in prison and $3,000 in fines.

Through his attorney Ryan Semerad, Schroefel challenged the state’s laws against gambling last month. He cast the law as so vague and riddled with nonsensical exceptions that normal people wouldn’t know how to comply with it and state officials could bring their own biases or interpretations to it.

Natrona County Assistant District Attorney Elizabeth Grill rebutted that Friday, saying Schroefel avoids discussing parts of the gambling prohibition that apply squarely to his conduct, while focusing on the supposed vagueness of exceptions that don’t.

“The defendant knew what he was doing — selling credits for cash to his customers so they could later spend the credits on the Defendant’s online gambling accounts so he could earn a living,” wrote Grill. “He maintained storefronts, paid employees and made approximately $500,000 of transfers from (his) accounts to the online application developers.”

Grill urged Natrona County District Court Judge Catherine E. Wilking to deny Schroefel’s request that she dismiss the charge against him as unconstitutionally vague.

Friends And Business Partners

Wyoming doesn’t criminalize gambling that happens in the course of “bona fide” business transactions and social relationships.

These carveouts are murky, Semerad argued.

The Wyoming Attorney General’s Office wrote in a 2024 memo that the Legislature may want to clarify its “social relationships” carveout.

Lawmakers have not done that. Colorado, which has a matching exception, has decided to look at situations to which it may apply on a case-by-case basis.

Grill elaborated in her filing, quoting a case that says, “The critical inquiry (in Colorado) is whether the participants … came together for any shared purpose other than gambling.”

In other words, if people have some other bond or purpose that draws them together besides gambling, they’ll fall under Colorado’s — and arguably Wyoming’s — social relationships carveout, the prosecutor indicated.

Chicken Or Egg

A second carveout Semerad had cast as confusing, and circular, is Wyoming’s exception for gambling that happens as part of bona fide business agreements.

A chicken-or-egg-first argument has followed.

Semerad argued that it’s tricky for people to tell where legal business transactions end and illegal gambling transactions begin, especially as the state embraces more gambling as legal, like online sports wagering, skill-based amusement games and parimutuel wagering.

Grill countered, saying Schroefel’s alleged hosting of for-profit gambling operations itself falls outside the realm of legal business transactions, by being a form of illegal gambling.

The Time Traveler

Schroefel’s challenge says the court should call the state’s gambling law unconstitutional because it exempts any kind of game-play that may be authorized in the future.

“Gambling” doesn’t include acts “hereafter expressly authorized by law,” says the state’s legal definition.

“This exclusion transforms the definition of ‘gambling’ into an ever-shifting target,” wrote Semerad. “As the law changes in the future, (that carveout) makes the law change in the past too. Consequently, what constitutes illegal gambling for the time being is always subject to retroactive revision.” 

Grill rebutted again, essentially saying those future carveouts haven’t been carved out yet.

“There is no such Wyoming law that exists authorizing defendant’s conduct now,” she wrote. “It is prohibited and criminal.”

From The Investigation…

The Wyoming Gaming Commission and later, Wyoming Division of Criminal Investigation, took an interest in Schroefel in June of 2023, when a woman called the commission to complain that the Mocha Moose coffee shop in Casper refused to pay her son roughly $7,000 in gambling winnings.

The investigation that followed, which included digital and in-person searches, a confidential informant, interviews and bank records, led the Natrona County District Attorney’s Office to allege that between Jan. 1, 2020, and Jan. 31, 2024, Schroefel helped others gamble so he could derive a profit.

He’s accused of taking bets and cashing out winnings for online gambling sites through his businesses. The woman who turned Schroefel in told investigators that people would pull up to the drive-up window at the Mocha Moose and ask for a code, give money to the employee and gamble online to win a payout at the shop, says the case affidavit.

Only people known to the employee or referred by another regular customer could get these codes, she said.

Wyoming Gaming Commission special agent Michael Hotard developed a confidential informant and investigated first the Mocha Moose, then Schroefel’s other businesses.

When executing a search warrant, Hotard noticed “several associations” between Schroefel and a man who’d had several earlier convictions from another state for conspiracy and illegal gambling, says the evidentiary affidavit in the case.

Investigators found numerous texts between the two discussing specific gaming sites, money, credits, accounts and raffles, says the document.

The affidavit says Wyoming Gaming Commission special agents conducted an undercover purchase of an illegal online gambling account bought from one of Schroefel’s alleged co-conspirators.

It alleges that in 2020, Schroefel’s bank denied a credit application citing “unreliable source of repayment due to income derived from business practices which are illegal under federal law,” says the document.

Clair McFarland can be reached at [email protected].