Casinos.co.uk: Casino News Archive
Wednesday 21st April 2004
Legal Proceedings
Opponents of Internet gambling have been battling it out in court over whether a person is liable for debt acquired with a credit card while gambling at online casinos, as in the case of In re MasterCard International, Inc., Internet Gambling Litigation. In the original lawsuit, numerous class actions were filed in district courts around the country and were consolidated into two “test” cases. In the Plaintiffs’ suit against MasterCard International, Visa International and several other banks that issue MasterCard and Visa credit cards, (“Defendants”), Plaintiffs attempted to use the Racketeer Influenced and Corrupt Organizations Act (“RICO”) to avoid debts incurred when they used their credit cards to purchase credits or “chips” that were used to gamble at online casinos, and sought to recover injuries sustained from the alleged RICO violations. However, the Court ruled in favor of the Defendants and dismissed Plaintiffs’ additional RICO claims and remaining state law claims. The Court concluded that the Plaintiffs did not allege facts showing a pattern of racketeering activity or the collection of unlawful debt, a RICO enterprise, or participation in the management of the enterprise. Importantly, the Court held that the Wire Act did not prohibit the Internet gambling at issue in these cases. As for the Plaintiffs’ remaining state law claims, which concerned statutes prohibiting gambling proceed transactions, the Court noted in its dismissal that is had previously determined that the transactions at issue consist of two events: 1) Plaintiffs’ transaction with the credit card company, which ends upon the receipt of credit, and 2) Plaintiffs’ subsequent online gambling. Plaintiffs’ claim failed because the transactions with the financial institutions at issue took place before the gambling occurred.
Lawsuits against casinos by gamblers are now becoming more prevalent throughout the Untied States. In Michigan, two “compulsive gamblers,” who signed up for a voluntary program where they were banned from casinos, have filed lawsuits against three casinos in state court alleging breach of contract since the casinos allowed them to continue gambling and failed to keep them out. Michigan, like six other states, provides a program where compulsive gamblers can place their names on a list that enables them to voluntarily ban themselves from casinos and face arrest if they attempt to enter. However, compulsive gamblers are not the only ones to bring lawsuits against casinos for gamblers’ gambling activities. In Snowney v. Harrah’s Entertainment, Inc., the Court attempted to evaluate the advertising practices of casinos. In that case, the Plaintiff sought to exercise personal jurisdiction in California over several divisions of Harrah’s, a Nevada-based casino corporation, and their marketing company (“Defendants”). The Court concluded that some of the Defendants did not qualify for the exercise of personal jurisdiction because they did not own or operate the hotels. However, based on advertising in California, an interactive Internet Website, a toll-free number for hotel reservations, and other advertising activities purposefully directed at California residents, the Court held that the remaining Defendants who owned and operated the Nevada hotels had sufficient contacts with California to justify the exercise of personal jurisdiction.
With all this talk of legal proceedings in the gaming industry, it is about time to mention the release of Jay Cohen from the Nellis Federal Prison Camp. Cohen was the only one of twenty-one offshore sports book operators who was indicted for violating the Wire Act to actually face charges in a United States court. Cohen, who plans to seek employment outside of the Internet gambling industry, is not finished with his battle in the United States court system since his legal team has just been granted the right to appeal the dismissal of his habeas corpus petition. The recent WTO ruling may also aid Cohen in his quest for vindication since it deals with the issue of cross-border gambling. “I still maintain I ran a legal business in another country,” Cohen said. “I regret that I did not get a fair trial or a fair appeals process. What if I were Chinese and ran a Website in the U.S. that was critical of China, then returned to China and was jailed? Would the U.S. support China on that?”
Lawrence G. Walters, Esq., is a partner in the national law firm of Weston Garrou & DeWitt, with offices in Orlando, Los Angeles, and San Diego. Mr. Walters represents clients involved in all aspects of online gaming operations. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at Larry@LawrenceWalters.com, through his website: www.GameAttorneys.com, or via AOL Screen Name: “Webattorney.”
Source:OnlineCasinoNews
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