A Court of Appeals in Washington State ruled Tuesday that Betcha.com, the battle-worn Seattle betting startup, had not violated state gambling law before it was forced to close nearly two years ago.
Betcha, a company billing itself as an online, honor-based betting operator, was shut down in July 2007 by the Washington State Gambling Commission, which alleged then that Betcha's mode of betting contravened the state's Gambling Act.
Betcha's model, though, was novel because it facilitated bets between users (and took a small commission on those bets) but didn't oblige losers to pay out. The company's founder, Nicholas Jenkins, argued that because losers weren't forced to pay, the services Betcha rendered were indeed compliant with the act.
"This guy has been right, technically, all along in his analysis of the gambling statutes," Lawrence G. Walters, a Florida attorney specializing in Internet gambling, told IGamingNews Tuesday. "There's betting here, but there's not gambling as it's been defined traditionally: Since there's no obligation to pay, you never actually stake anything and expect to lose anything."
In his majority opinion Tuesday, Presiding Chief Judge C.C. Bridgewater decreed Betcha's activities did not violate the state's definitions for gambling and bookmaking, respectively -- foundational definitions on which attorneys for the gambling commission relied to establish Betcha had broken additional laws.
The gambling commission has now to decide whether to appeal the case to the State Supreme Court.
"Right now, we're reviewing the judges' opinion and consulting with our client, and we'll make a decision on how to proceed in the coming weeks," Daniel N. Styman, a spokesman for the state Attorney General's office, told IGamingNews Wednesday.
Mr. Walters, who is not involved with Mr. Jenkins' case, expects the state will appeal to the Supreme Court. Assuming the state loses there, however, he said the court's decision could be used by entrepreneurs as a basis to launch new sites.
Neither Mr. Jenkins nor his attorney, Lee H. Rousso, could be reached for comment by press time, but Mr. Jenkins told The Seattle Times Wednesday that he did not intend to relaunch Betcha.
"I've learned my lesson the hard way," he told the paper.
Separate from the company's case in Washington, Mr. Jenkins and two Betcha employees were extradited to Louisiana on gambling-related charges in October 2007. It was revealed then the Louisiana police -- in conjunction with the Washington gambling commission -- had wagered $35 at Betcha's Web site. For accepting those bets, Betcha netted 70 cents.
The three were released after spending 24 hours in jail, and Mr. Jenkins subsequently reached an agreement with prosecutors there to have the charges dropped.
Click here to view a copy of the appellate court's decision.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.