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.

Filed Under: gambling, online gambling, renege, wagering, washington
Companies: betcha

Non-Gambling Sports Betting Site Doesn't Last Too Long

from the gotcha.com dept

A few weeks ago, we mentioned the launch of Betcha.com, a sports betting website that was attempting to skirt anti-gambling laws by making payments voluntary. The reasoning of the site's founders was that if players weren't technically obliged to pay up on losing bets, then they weren't actually gambling. Of course, the site had no assurances that the government would agree with its interpretation of the law, so the founders were literally putting their freedom on the line. Well, it didn't take long for Betcha.com to get busted. Authorities in Washington state have seized the company's computers (via Midas Oracle), as law enforcement officials felt that the site was in contravention of a 2006 law against online gambling. It's not particularly surprising that authorities didn't agree with Betcha.com's interpretation of the law, although it is very surprising to learn that the site was operating out of Washington, because of all of the states, Washington has taken the hardest line against internet gambling. Gee guys, isn't dealing with the federal gambling ban enough of a headache?

Filed Under: gambline
Companies: betcha