United States v. Arvay: “Knowingly Conducted a Gambling Business” Instruction Satisfies § 1955 Mens Rea (O’Brien) Without Separate “Participation in Gambling” Language

1. Introduction

In United States v. Arvay, the Tenth Circuit reviewed jury instructions used to convict Jonathan Arvay of (1) conducting an illegal gambling business under 18 U.S.C. § 1955 and (2) conspiring to do the same under 18 U.S.C. § 371. The prosecution’s theory centered on an arcade (Player One Arcade in Denver) that awarded cryptocurrency (odacoin) as a “prize,” which could then be exchanged for cash next door via a cryptocurrency teller machine (CTM) that Arvay helped operate and maintain.

The appeal focused less on whether the operation functioned like gambling in practice and more on whether the jury was properly instructed on the mental state required for § 1955—specifically, whether the jury needed to be told it must find Arvay knew his acts were “of participation in gambling,” language drawn from United States v. O'Brien. Arvay also attacked the court’s general “knowingly” instruction (including deliberate-ignorance language) and argued that any errors necessarily infected the conspiracy instruction.

2. Summary of the Opinion

The panel affirmed. It held that the challenged instructions accurately stated governing law and, in particular, that:

• The § 1955 elements instruction, requiring a finding that Arvay “knowingly conducted … a gambling business,” already satisfied United States v. O'Brien’s knowledge requirement.
• The court’s definition of “conducts” (participation in a necessary operational function) ensured the jury could not find “knowing conduct” without finding knowing operational participation in a gambling business.
• The “knowingly” instruction’s reference to awareness of a “high probability” of participation in a business with “features making it a gambling business” was not inconsistent with O'Brien.
• Even assuming instructional error, any error was harmless beyond a reasonable doubt given the strength of evidence showing Arvay understood cash payouts would be “gambling” yet structured a cryptocurrency-to-cash pathway through the CTM.
• Because the underlying instructions were not erroneous, the conspiracy instruction was not tainted.

3. Analysis

3.1 Precedents Cited

Standards for reviewing jury instructions and preserved objections

• United States v. Flechs (quoting United States v. Jean-Pierre): The panel applied the familiar “instructions as a whole” approach—reviewing de novo whether the instructions accurately stated the law and framed the factual issues correctly.
• United States v. Bedford: For preserved objections to the decision to give/refuse a particular instruction, review is for abuse of discretion.
• United States v. Woodmore (quoting United States v. Olea-Monarez): Defines abuse of discretion in instructional rulings (arbitrary/capricious/whimsical or outside permissible bounds).

Harmless-error framework for instructional mistakes

• United States v. Kahn: Even if an instruction is wrong, the appellate court evaluates whether the error was harmless.
• United States v. McGirt: Places the burden on the government to show harmlessness; also supplies the “beyond a reasonable doubt” formulation for constitutional error (via Neder).
• United States v. Rivera: Distinguishes constitutional vs. nonconstitutional harmless-error standards; quotes Kotteakos for nonconstitutional “substantial influence / grave doubt” test.
• Neder v. United States: Constitutional harmlessness—whether beyond a reasonable doubt the error did not contribute to the verdict.
• Kotteakos v. United States: Nonconstitutional harmlessness—whether error had substantial influence or leaves grave doubt.

Plain-error framework for unpreserved issues

• United States v. Buntyn and United States v. Brown: Plain-error applies to unpreserved instructional claims; appellant bears the burden (as noted in Brown).
• United States v. Paycer (quoting United States v. Frost): Four-part plain-error test (error, plainness, substantial rights, fairness/integrity/public reputation).

The key mens rea precedent under § 1955

• United States v. O'Brien: Central to the appeal. O'Brien characterizes § 1955 as a general-intent statute: the government need not prove the defendant knew the “five or more persons,” “30 days,” “$2,000 day,” or state-law-violation features. But it still requires proof the defendant knew his act was “one of participation in gambling.”
• Staples v. United States (Ginsburg, J., concurring): Quoted in O'Brien to emphasize that stating “knowledge is required” begs the question “what level of knowledge suffices.” In Arvay, this quote functions as context: the Tenth Circuit treats “knowledge” as having a specific content under § 1955, but not one that demands knowledge of every jurisdictional or structural element of the illegal gambling business.

State-law concepts and pattern instructions (as applied in this case)

• The court referenced Tenth Circuit Criminal Pattern Jury Instructions (§ 2.72 for § 1955; § 1.37 for “knowingly”) as consistent with the district court’s approach.
• The court also addressed Colorado statutory definitions relevant to “simulated gambling device” (including Colo. Rev. Stat. § 18-10.5-102(3.5)) to reject Arvay’s “game of skill” argument.

3.2 Legal Reasoning

(A) The § 1955 instruction captured O'Brien without using O'Brien’s exact phrasing

Arvay argued the jury needed an express instruction that it must find he knew his acts were “of participation in gambling.” The panel rejected this as a matter of substance over form. The instruction required jurors to find that Arvay “knowingly conducted, financed, managed, supervised, directed, or owned all or part of a gambling business.” That aligns with the statutory text and, crucially, with O'Brien’s own analysis—where O'Brien deemed the knowledge requirement satisfied by evidence the defendants knowingly engaged in those operational roles.

The court then connected the dots with the instruction’s definition of “conducts”: participation in the operation of the gambling business “in some function necessary to the operation.” That definitional linkage mattered. In the panel’s view, the jury could not coherently find Arvay “knowingly conducted” the business without also finding he knowingly participated in its operation—i.e., knowingly participated in what the instruction defined as a “gambling business.”

(B) The “knowingly” instruction’s “features making it a gambling business” language was not inconsistent with O'Brien

Arvay attacked the deliberate-ignorance portion of the “knowingly” instruction, emphasizing its phrasing about a “high probability” of “participation in a business that had the features making it a gambling business.” The panel treated this as simply one permissible inference path rather than an exclusive definition of knowledge. More importantly, it saw no meaningful gap between:

• knowing one is participating in a business with features that make it a gambling business, and
• knowing one’s acts are participation in gambling.

Thus, the panel found no instructional error.

(C) Harmlessness (even under the constitutional standard) was independently dispositive

The court went further: even if any mens rea instruction was wrong, it was harmless beyond a reasonable doubt. It anchored harmlessness in trial evidence demonstrating Arvay’s understanding of what would constitute prohibited gambling and his role in enabling cash-out:

• Arvay told undercover agents he could not give “cash payouts” because that would be “gambling” in Denver.
• He nonetheless offered cryptocurrency prizes and directed patrons to exchange the cryptocurrency for cash next door.
• He maintained and supported the CTM (clearing jams, keeping it stocked with cash, providing login credentials, training employees, and being the point of contact for CTM issues).

From these facts, the panel concluded the jury’s verdict did not hinge on any disputed nuance about “knowledge”—the evidence placed Arvay’s awareness beyond reasonable doubt.

(D) Conspiracy instruction challenge failed because the underlying instructions were valid (and/or harmless)

Arvay’s conspiracy argument was derivative: if the § 1955 and “knowingly” instructions were wrong, the conspiracy instruction was tainted. Because the panel found no error (and alternatively harmlessness), it rejected this “carryover” theory.

3.3 Impact

Although designated nonprecedential, United States v. Arvay is likely to be cited for persuasive value in future § 1955 cases—especially those involving modern “cashless” or crypto-adjacent payout mechanisms—on three points:

• Instruction drafting: Trial courts in the Tenth Circuit can be confident that an elements instruction tracking § 1955 (“knowingly conducted … a gambling business”) plus an operational definition of “conducts” will generally satisfy United States v. O'Brien, without needing to add an extra sentence that the defendant “knew his act was participation in gambling.”
• Deliberate-ignorance framing: The panel treated “features making it a gambling business” as materially equivalent to knowledge of “participation in gambling,” signaling tolerance for pattern-instruction language in this area.
• Harmless-error backstop: The opinion illustrates how strong evidence of the defendant’s functional understanding—especially statements acknowledging illegality plus conduct facilitating payouts—can render mens rea-instruction disputes non-outcome-determinative.

More broadly, the fact pattern underscores how § 1955 prosecutions may adapt to structures designed to appear “non-cash” (points, prizes, cryptocurrency) while still providing a cash-out pathway; the panel’s analysis suggests that juries may treat such structures as gambling when the “thing of value” and cash conversion are operationally integrated.

4. Complex Concepts Simplified

• General intent vs. specific intent: A “general intent” crime typically requires proof the defendant acted knowingly/voluntarily with respect to the prohibited conduct, not that the defendant intended a further purpose or knew every legal detail. Here, § 1955 does not require knowledge of (for example) the five-person threshold or that state law was violated, but it does require awareness that one is participating in gambling activity (as articulated in O'Brien).
• “Conducts” an illegal gambling business: Under the instruction used here, “conducts” means taking part in operating the business in a necessary function—more than being a mere customer or bettor.
• Deliberate ignorance (“willful blindness”): Jurors may infer knowledge when a defendant strongly suspects a fact (a “high probability”) and deliberately avoids confirming it. The instruction allowed an inference of knowledge if Arvay was aware of a high probability that he was participating in a business with gambling features.
• Harmless error vs. plain error: Even if a court makes a mistake in an instruction, an appellate court may still affirm if the mistake did not affect the verdict (harmless error). If the defendant did not properly preserve the issue in the trial court, the defendant must satisfy the stricter “plain error” test.
• State-law predicate in § 1955: Section 1955 incorporates state gambling law by requiring that the gambling business violates state law. But per O'Brien (as reiterated in this opinion), the government need not prove the defendant knew the business violated state law.

5. Conclusion

United States v. Arvay reaffirms (in persuasive, nonprecedential form) a practical approach to § 1955 mens rea instructions in the Tenth Circuit: a jury instruction requiring proof that a defendant “knowingly conducted … a gambling business,” together with an operational definition of “conducts,” is sufficient to satisfy United States v. O'Brien’s requirement that the defendant knew his acts constituted participation in gambling—without mandating O'Brien’s exact wording.

The decision also signals that, where the evidence strongly shows a defendant understood cash payouts would be “gambling” yet facilitated an indirect cash-out scheme (here, via cryptocurrency and a CTM), instructional disputes over nuance in knowledge formulations are unlikely to change the outcome under harmless-error review.