The Judge: Internet Gambling is not Illegal
By claire
A federal judge has ruled in a major decision that Internet gambling is not a crime - sometimes. Judge Stanwood R. Duval, Jr., of the U.S. District Court in New Orleans issued the ruling in late February, 2001. He dismissed two test cases brought against MasterCard and Visa, allowing Web betting sites to continue to take credit cards. Judge Duval gave many reasons for throwing out the suits, including a legal conclusion that Internet gamblingís main nemesis, the federal Wire Act, applies only to sports betting. The opinion illustrates how important it is for lawyers to research the law before they file their lawsuits. With a few changes, the nationís two largest credit card companies might have been ordered to stop being involved with Internet gambling. The cases arose from what should have been a fairly easy legal question: If a player uses his credit card to make bets online, does he have to pay the bill when it comes in the mail? In most states and under most sets of facts the answer is clearly, "No." Since 1710 when Queen Anne of England signed the statute of Anne, gambling debts have been unenforceable under the common law of the English-speaking world. Anyone who lends anyone else money, knowing the money will be used for gambling, is making a contract that is normally unenforceable.

Nevada is the best example. If a Las Vegas casino accepts an oral bet and the player loses and refuses to pay, the casino has no legal right to sue. The Nevada Legislature had to pass a special law to allow suits on written markers. In 1992, the Massachusetts Appeals Court ruled that a gambler, Richard Kommit, did not have to pay his MasterCard bill for $5,500 cash he got from an ATM on the floor of an Atlantic City casino. The Court held that under the laws of Massachusetts, where Kommit lived, New Jersey, where he gambled, and Connecticut, where the bank issuing the MasterCard was located, credit card loans for gambling are unenforceable.

In 1998, Cynthia H. Haines was sued by MasterCard and Visa for more than $70,000, money they claimed she lost gambling via the Internet. Hainesís attorney, Ira Rothken of Corte Madera, California, filed a counterclaim. He carefully limited his legal claims to California state laws, which bar credit card loans for gambling. Although he asked for money damages, he was mainly seeking a court order that MasterCard and Visa had to stop doing business in California with online gambling operators.

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