A $1.3 Million Education for Youbet.com

14 January 2000
Three months after an investigation into criminal activity, the Los Angeles County District Attorney and the Los Angeles Police Department have reached a settlement with Youbet.com. According to Youbet.com, no issues of law or fact were determined under the settlement, and both parties agreed that a "prompt and comprehensive civil resolution of the matter" was best.

Pursuant to the settlement, the company will no longer handle wagers from California subscribers, and until state law is clarified, these customers will only be able to receive Youbet's information services. Additionally, Youbet.com agreed to move from California certain equipment that might be considered to record wagering information.

And the kicker: Youbet has also paid out $1,308,250 in court costs, civil payments and contributions to the Los Angeles County Education Foundation and the California Council on Problem Gambling.

"We are pleased to put the California matter behind us," Youbet.com Chairman and CEO Robert Fell said. "Youbet.com believes that its use of computers and internet-related communications facilities in connection with the storage and transmission of wagering data and instructions within the State of California raises untested questions of law and fact under California law which have not been adjudicated.

"When the legal environment is clarified in California and nationally, it is Youbet.com's intention to resume activities in California. The settlement enables Youbet.com to concentrate its energies on developing the You Bet Network, both in the United States and overseas, without the distraction of protracted and costly proceedings in California."

In mid-October 1999, Deputy District Attorney Loren Naiman led a raid on Youbet.com by the district attorney's High Technology Analysis and Litigation team, the Los Angeles police department's vice squad, agents of the LAPD financial crimes unit, and the Orange county sheriff's office. At that time Naiman said the issue at question was "whether attempts by companies like Youbet to skirt the law do successfully get around state and federal legislation against gambling."