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>He sold gambling software while living in a state where gambling was illegal.

Jack Daniels Whiskey is made and sold by a distillery in a county where selling liquor is illegal.

Where selling liquor to consumers is illegal. It's perfectly legal in Moore County to sell liquor to retailers and wholesalers.

The programmer in question wasn't selling gambling services to consumers, he was selling gambling software to "retailers and wholesalers" who in turn served gambling consumers.

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