An Ugly Break-up

10 May 1999
The relationship between online gaming software developer Interactive Gaming & Communications Corp. (IGC) and InterCapital Canada Ltd., the operator of "The Online Casino," came to an end on May 1, and the fallout isn't pretty. IGC, no stranger to legal clashes, issued a news release Friday stating that it has taken action against InterCapital, a subsidiary of Total Entertainment, Inc., for allegedly continuing to use software developed by IGC subsidiary Intersphere Communications Ltd., despite the termination of the relationship.

The news release states that IGC is going after InterCapital for unauthorized use of IGC source code as well as other copyright infringements. According to the release, IGC has "obtained a temporary injunction along with a search and seizure order of computers and software issued by the Canadian Superior Court and signed by the Honorable Francois Belanger, JES, against InterCapital Global Fund Ltd., T/A The Online Casino, InterCapital Canada Ltd., Alex Kennedy, Sandy Masselli, and Steven F. Savage, for the unauthorized use and possession of IGC's 'LiveAction Gaming Platformtm,' source code, and other copyright infringements." It also states that the Montreal, Quebec Canadian Superior Court officers entered the offices of InterCapital Global Fund in Canada on May 4 and froze the computers and software, thus putting a halt to what IGC believes to be "unauthorized use of Intersphere's software used in the operation of The Online Casino and Sportsbook."

Total Entertainment, however, reported that it had previously terminated its agreement with IGC , that it has ceased using Intersphere's software as of May 1 and that the temporary order and injunction went unchallenged.

InterCapital signed a one-year licensing deal with Intersphere on June 8, 1999 for the operation of The Online Casino and Sportsbook, located at Unhappy with the way things were going, Total Entertainment elected to switch to Atlantic International Entertainment's software and notified IGC that they would no longer use be using Intersphere's software as of May 1. According to Total Entertainment, the transition had been in the planning since January 1999.

Total Entertainment also maintains that no hardware or corporate records were seized as "erroneously reported in SBET's press release." In response to IGC's statements, Total Entertainment pointed out that only a backup copy of Intersphere's software--which Total Entertainment claims wasn't in use--was collected by a court-appointed process server.

Meanwhile, IGC claims that "the defendants had improperly obtained portions of the company's proprietary and copyrighted source code and was representing itself as a casino software developer, a publicized fact that the defendants verbally denied." IGC intends to seek the prosecution of all violators of copyright laws and to seek the maximum amount of compensatory damages allowed by the courts.

IGC also alleges that the Total Entertainment website ( falsely advertises that they "provide software that allows gaming license holders the ability to create an electronic entertainment and gaming facility, for use on the Internet," and that they have also developed an "Internet-based gaming package, which includes a 'back-end' gaming software package that transfers the 'front-end' information (i.e. card or dice numbers) between the user and the remote server." According to IGC, the systems, applications and the functionality described above are provided by Intersphere.

Total Entertainment President Mitchell Brown is convinced that the IGC is frustrated by the early termination of the original agreement. "Interactive Gaming and Communications Corp.'s press release represents the company's failed attempt at retribution for losing their largest customer," Brown said. "As we are applying for gaming licenses in international jurisdictions, we cannot continue doing business with a company with a questionable background, such as SBET and its principal, Michael Simone."

For IGC, legal disputes are nothing new. The company, along with Simone, was taken to court by Missouri Attorney General Jay Nixon for offering bets to Missouri citizens, a charge to which Simone pleaded guilty in October 1998. IGC was also involved in a well publicized controversy in which several account holders at Sports International, an online sportsbook formally operated by IGC, lost all their money when the website shut down. The site was reopened by its new operator, International Gaming Corp. of Vancouver, however, it closed again within a few weeks.

Total Entertainment, meanwhile, has re-launched The Online Casino, using Atlantic's software, and plans to begin taking bets at two additional sites in the near future.