Court Says It's Not Online Gambling If You Can Renege On A Bet

from the hello-loophole dept

The US has always had this odd hatred for online gambling -- but no state has been more aggressive about the issue than Washington state -- even to the point of threatening people with arrests for even talking about online gambling. So, you can imagine that the state didn't look too favorably on the launch of a person-to-person "wager" site called Betcha.com which claimed it had found a nice loophole that made it legal: you could renege on your bet. Yes, if you lost a wager, you could click a button saying "I refuse to pay." The catch, of course, was that the site had a rating system, and if you reneged, it was likely to harm your rating, and others might refuse to bet against you. Betcha claimed that the presence of the renege button meant that it wasn't actually gambling, because you never actually had to bet any money.

The state of Washington not only disagreed, it took a month or so until state authorities raided the company, arrested its founders and seized its computers. That seems pretty extreme for what does seem to be a rather open question in the law. And, in fact, a state appeals court found that the Betcha founder is right: the presence of the renege button means that the site is not a gambling site:
"Accordingly, there is nothing risked, which is the essence of both the common law and statutory definition of 'gambling.'"
Of course, that doesn't mean Betcha is coming back into existence. Since its founder (who has a law degree and had carefully researched gambling laws to make sure the loophole was legit) was arrested, thrown in jail, extradited to Louisiana, charged (in Louisiana) with gambling-related felonies finally forcing him to negotiate a plea bargain, dropping the charges if he agreed to certain conditions. With that experience in mind, restarting the site and risking it happening again just doesn't seem that appealing.

So, way to go Washington State -- you tossed a guy in jail for a completely legal web business.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Joe Hunkins, Feb 11th, 2009 @ 3:49pm

    Betcha

    I'll betcha $20 he'll be back....

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    some other guy, Feb 11th, 2009 @ 4:00pm

    Re: Betcha

    You're on. (I can always renege on it if I lose) :)

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Griffon, Feb 11th, 2009 @ 4:00pm

    be back with cash

    Yeah, back with a lot of cash from freshly folded by the state of Washington in form of settlements for false arrest, imprisonment, destruction of property, willful harm yada yada. I certainly hope the days of out of control fascists in the government are drawing close, but that might to much to wish for.

     

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  4.  
    identicon
    Davis Freeberg, Feb 11th, 2009 @ 4:22pm

    Legalize it

    If they legalized online gambling, you wouldn't have to worry about shady people welching on their bets. Hats off to him for finding the loophole, but why not legitimize the industry, put strong consumer fraud protections into place and then tax the profits instead of letting all that money flow into unregulated offshore businesses? Whether it's legal or not, a significant chunk of people are going to gamble no matter what. We can either turn our citizens into criminals for doing something that is allowed in some states but not others or we can use their behavior to help pay for schools, roads and social services that the rest of the population can enjoy.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Feb 11th, 2009 @ 4:32pm

    Washington

    Welcome to the greatest nanny-state in the nation. If it might be bad for the individual, those-who-know-best will take it away; either through outright legislation, or thinly-veiled attempts to socially engineer it out of existence.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Voice of Reason, Feb 11th, 2009 @ 4:50pm

    Cute

    Yeah, he tried to be cute, didn't he?

    Didn't work.

     

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  7.  
    identicon
    Anonymous Coward, Feb 11th, 2009 @ 5:09pm

    The land of freedom and opportunity...

    Muahahaha

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Jesse, Feb 11th, 2009 @ 5:16pm

    I'm not understanding why he needed to make a plea bargain, if he didn't break the law? Isn't this false arrest? Why hasn't he made a lot of money on a false arrest lawsuit?

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Steven, Feb 11th, 2009 @ 5:35pm

    Re: Washington

    It's not about stopping gambling. It's about keeping the Indian reservation gambling a monopoly, and keeping that fat cash coming in from the tribes.

    The tribal casinos here in Washington are pretty close to what you'd see in my home town of Reno NV (not near what you'd see in Vegas though).

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Spectere, Feb 11th, 2009 @ 7:09pm

    Re: Cute

    What he was doing was perfectly legal. It doesn't matter if he was trying to be "cute" or not.

    I don't know about you, but stories like this are scary as hell. They had no just cause for arresting him and they went ahead and did it anyway. That's not acceptable by any stretch of the imagination.

     

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  11.  
    identicon
    Anonymous Coward, Feb 11th, 2009 @ 9:18pm

    Re: be back with cash

    I agree. Knowing how the legal system tends to work these days, if the dude has a law degree, he was probably just waiting for the final verdict before he let the lawsuits start rolling. If he's a really good lawyers, he'll likely even agree to have his settlement "reduced" in exchange for having his record expunged.

     

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  12.  
    identicon
    Anonymous Coward, Feb 11th, 2009 @ 10:39pm

    Re: Re: Washington

    Of course, it's not only the Indian casinos (many of which are larger than most Nevada casinos). It's the state's own lottery, which contributes over $100 million (net) into the state's coffers. And, did I mention horse-racing?

     

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  13.  
    identicon
    ederd6048, Feb 11th, 2009 @ 10:55pm

    indian casinos

    Why don't yall give the natine americans a break us the white man owes them a debt that can never b paid we stole their land then turned around & give it 2 the Darkies But the redman is getting back i token at a time and this white boy says about time they get something

     

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  14.  
    identicon
    pwb, Feb 11th, 2009 @ 11:37pm

    "there is nothing risked"

    I'm surprised this obvious untruth made it into a court document.

     

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  15.  
    icon
    Rob (profile), Feb 12th, 2009 @ 12:54am

    Washington State

    I can not WAIT to leave this hell hole of a nanny state and start my own business only a few miles over the border. It'll be sweet throwing all this awesome taxed income to another government and watching Gregoire run up billions more in debt.

    God, do I ever hate this state.

     

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  16.  
    identicon
    Tamara, Feb 12th, 2009 @ 12:57am

    Australia also has ridiculous on-line gambling laws. Sports betting before the event begins is the only legal online gambling allowed. Live sports betting (who'll win after the match starts, next person to ...), poker, etc. Australian owned sites are allowed to offer those services, but not to any Australian customers and the servers have to be based overseas. So that's jobs that go offshore. Also there is no way to stop overseas sites allowing Aussie customers. It's total bullshit.

     

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  17.  
    identicon
    Dave, Feb 12th, 2009 @ 6:43am

    Re: Cute

    I fully agree. Whether it was technically legal through exploiting a loophole it was clearly in violation of the spirit of the law.

    Now I don't necessarily agree that gambling should be illegal as long as the society is willing to help those who get addicted and lose everything (which in most cases the government is not) but I do agree that some guy using loopholes to get around the law is still a jerk.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Anonymous Coward, Feb 12th, 2009 @ 7:16am

    Re:

    I'm not understanding why he needed to make a plea bargain, if he didn't break the law?

    You're right, you're not understanding the criminal justice system. Whether you are guilty or innocent often makes less difference than how much money you have. This guy probably didn't have enough money to fight. Without money you can either lay down and beg them not to hurt you too badly (plea bargain) or commit "suicide" by standing up and maintaining your innocence. Your choice. Is this a great country or what?

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    Anonymous Coward, Feb 12th, 2009 @ 7:17am

    Re: Re: Cute

    I fully agree. Whether it was technically legal through exploiting a loophole it was clearly in violation of the spirit of the law.

    No, it was clearly a violation of neither the spirit nor the letter of the law. However, those who claim otherwise are clearly being dishonest.

    Now I don't necessarily agree that gambling should be illegal as long as the society is willing to help those who get addicted and lose everything...

    Just exactly how are you going to "lose everything" on a bet that you don't have to pay? Again, such a claim seems to be somewhat dishonest.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    matt, Feb 12th, 2009 @ 7:20am

    explanation

    "So, way to go Washington State -- you tossed a guy in jail for a completely legal web business."


    But you see, they don't LIKE it. And that means they can do pretty much whatever they want. We used to live in a nation of laws and now live in a nation chock full of laws to be manipulated against you in event of personal or moral disagreement.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Helter, Feb 12th, 2009 @ 9:27pm

    Re: Re: Cute

    I hate the term "loophole".
    If the law says that gambling is illegal, and defines gambling as interactions that meet a set of criteria, then that is the law. Interactions that do not meet that criteria are not covered under law, and should be legal. It should not be the state's prerogative to harass you for their failure to craft laws that outlaw behavior that they feel to be undesirable.

    These issues would not be a problem if states did not constantly attempt to criminalize actions that their people want to engage in, that result in no victimization.

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Jo Alljackpots, Apr 15th, 2009 @ 3:46am

    gambling

    Enter an online casino and play online slot machines with the look and feel of a Las Vegas casino. How long have you been looking for a reliable and safe casino? If you're like most people, then you probably did quite a bit of reading and searching on the web, trying to find not just the best online casino, but the perfect slots casino for you.

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    alex, May 19th, 2009 @ 9:09pm

    quesiton?

    In google, i don't search safe casino

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    Anonymous Coward, May 19th, 2009 @ 9:11pm

    poker-du

    Information about poker club in site.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Casino Junkie, Jul 14th, 2009 @ 11:30pm

    my opion is needed

    No matter how the government will against on legalizing online casino still their are people who will push to make it legal. In some sense it can also help the economy of our nation because of the bigger taxes generated out from it. Let me draw an example. In Philippines they legalize PAGCOR it's a gambling company but then in return with that the PAGCOR contributed much on helping the economy of the nation because they also had some charity institutions that give assistance to those less fortunate people.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    gamblig junkie, Aug 5th, 2009 @ 8:43am

    it might be bad for the individual

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    Jason Welsch, Dec 7th, 2009 @ 6:35pm

    That is strangely mean! What were they thinking? If I were the founder I'd sure them big time for jailing me and I'd collaborate with other sites outside the US like the Gamblux casino to put up another legit company.

     

    reply to this | link to this | view in thread ]

  28.  
    icon
    Casino Fan (profile), May 9th, 2010 @ 8:04am

    Government

    The legal system is a perfect tool for anyone, government or not, to harass someone you disagree with. It is especially pathetic when you run afoul of some government entity. They have unlimited money to pay lawyers to drive you down into the ground - not to mention the fact that they can toss you in jail.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    d. davis, Aug 15th, 2010 @ 8:49pm

    Re: Legalize it

    Amen to that!

     

    reply to this | link to this | view in thread ]

  30.  
    identicon
    Online Gambling, Oct 19th, 2010 @ 7:09pm

    Hire him instead

    Why did the owner have to bargain when he did nothing illegal at all? The government could at least hire him for effectively discovering anti-online gambling law loopholes. He'll be the one to perfect each and every law. =))

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Tobyka, Dec 9th, 2010 @ 5:58pm

    Gaming Club Casino - 30 Free Spins! No Deposit Needed! Visit: gamingclubfreespins.cjb.net !

     

    reply to this | link to this | view in thread ]


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