Background
In 2021, federal agents investigated illicit gambling establishments in Colorado linked to cryptocurrency prizes. The defendant, Jonathan Arvay, co-owned an arcade that allowed players to earn cryptocurrency points redeemable for cash via a machine next door. A grand jury charged Arvay with conducting an illegal gambling business and conspiring to do so. A jury convicted him on both counts, and he was sentenced to prison and supervised release. Arvay appealed, challenging three jury instructions regarding the elements of the offense and the definition of knowledge.
The court’s reasoning
The court reviewed the jury instructions de novo and for abuse of discretion. It found the instructions correctly stated that a defendant need not know the business violated state law but must know their act was one of participation in gambling. The court noted the instruction explicitly defined conducting a business as participating in its operation, satisfying the mens rea requirement. Even assuming error, the court found the evidence overwhelming that Arvay knew giving cash prizes was illegal but facilitated it through cryptocurrency exchanges, rendering any error harmless beyond a reasonable doubt.
We affirm Arvay’s convictions because the district court’s instructions were correct. And even if we were to conclude otherwise, the purported errors did not affect the jury’s verdict given the strength of the government’s evidence at trial.
United States v. Arvay, No. 24-1497 (10th Cir. June 29, 2026)
What it means going forward
The decision reinforces that jury instructions defining the knowledge element for illegal gambling business offenses must align with the requirement that the defendant knowingly participated in the operation of the business. It also confirms that appellate courts will find instructional errors harmless when the evidence of the defendant’s knowledge is overwhelming.