GIL GARCETTI
District Attorney
EDWARD G. FELDMAN, State Bar No. 40164
LOREN F. NAIMAN, State Bar No. 87491
THOMAS A. PAPAGEORGE, State Bar No. 77690
Deputy District Attorneys
201N. Figueroa Street, 16th Floor
Los Angeles, California 90012
Telephone: (213) 580-3305
ORIGINAL FILED:
JAN 13 2000
LOS ANGELES
SUPERIOR COURT
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
Case No. B C223065
STIPULATION FOR ENTRY OF FINAL JUDGEMENT
THE PEOPLE OF THE STATE OF CALIFORNIA
Plaintiff
V.
YOU.BET.COM, INC., a Delaware Corporation
Defendant
Plaintiff, THE PEOPLE OF THE STATE OF CALIFORNIA, having filed its Complaint herein; and
Plaintiff, THE PEOPLE OF THE STATE OF CALIFORNIA, appearing through its attorneys Gil Garcetti,
District Attorney for the County of Los Angeles, by Edward G. Feldman, Loren Naiman and Thomas A.
Papageorge, Deputy District Attorneys, and Defendant YouBet.Com, Inc., a Deleware Corporation (hereinafter
"Defendant"), appearing through its counsel, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, by
Robert L. Shapiro, Esq.; and
WHEREAS, Plaintiff contends that Defendant has violated the provisions of the unfair competition law
(Business and Professions Code section 17200 et seq.) and the false advertising law (Business and
Professional Code section 17500) with respect to its practices within four years of filing this complaint;
WHEREAS, Defendant contends that its activities in California have at all times been consistent with
applicable California law, and that it has at all times exercised due care to assure its compliance with
applicable California law, including without limitation relying in good faith upon advice of counsel;
WHEREAS, Defendant contends that the use of computer And Internet-related communication facilities in
connection with the storage and transmission of data and instructions concerning parimutuel wagering on horse
races raised questions of law and fact which have not been adjudicated;
WHEREAS, Plaintiff and Defendant acknowledge that it is appropriate and in the interests of justice that
there be a swift and comprehensive civil resolution of the matter;
WHEREAS, Defendant wishes to assure it compliance with California law and has agreed
to limit its activities in California, as provided in the Final Judgment Pursuant to Stipulation involving, among
other things, the movement of certain of its data processing equipment to outside the State of California until
such time, if ever, as California law clarified and/or changed to permit some or all of such activities in
California.
WHEREAS, Defendant desires to demonstrate its good corporate citizenship but does not admit and
denies any violation of the laws of the State of California;
IT IS HEREBY STIPULATED by these participants that the Court may enter this Final Judgment as
attached to this Stipulation as Exhibit A and incorporated here as if set forth in its entirety.
IT IS FURTHER STIPULATED by these parties that, in recognition of the technical difficulties involved in
moving defendant's relevant California operations, no violation of the injunction provisions in paragraph 3(b) or
3(c) of the attached Final Judgment occurring before February 29, 2000, shall constitute an intentional violation
of this injunction within the meaning of Business and Professions Code section 17207 provided that defendant
has acted as promptly as is commercially reasonable to effectuate the removal of its relevant operations;
IT IS FURTHER STIPULATED by these Parties that the proposed Final Judgment may signed and entered
by any Judge or Commissioner of the Superior Court of the State of California, County of Los Angeles,
provided this Stipulation has been executed by all counsel listed below.
DATED: 1/12/00
GIL GARCETTI
District Attorney
EDWARD G. FELDMAN
LOREN NAIMAN
THOMAS A. PAPAGEORGE
Deputy District Attorneys
By: THOMAS A. PAPAGEORGE,
Head District Attorney
ATTORNEYS FOR PLAINTIFF PEOPLE OF THE STATE OF CALIFORNIA
DATED: 1.12.00
CHRISTENSEN, MILLER, FINK, JACOBS, GLASER, WEIL
& SHAPIRO, LLP
By: ROBERT L. SHAPIRO, ESQ.
ATTORNEYS FOR DEFENDANT YOUBET.COM, INC.
GIL GARCETTI
District Attorney
EDWARD G. FELDMAN, State Bar No. 40164
LOREN M. NAIMAN, State Bar No. 82491
THOMAS A. PAPAGEORGE, State Bar No. 77690
Deputy District Attorneys
201 N. Figueroa,16th Floor
Los Angeles, California 90012
Telephone: (213) 580-3305
Attorneys for Plaintiff
FINAL JUDGEMENT PURSUANT TO STIPULATION
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
THE PEOPLE OF THE STATE OF CALIFORNIA
Plaintiff
V.
YOUBET.COM, INC., Delaware Corporation,
Defendant.
Plaintiff, THE PEOPLE OF THE STATE OF CALIFORNIA, having filed its complaint herein: and defendant
YOUBET.COM, INC., a Delaware Corporation (hereinafter "YouBet"), having accepted service thereof, and
Plaintiff appearing through its attorneys Gil Garcetti, District Attorney of the County of Los Angeles, State of
California, by Edward G. Feldman, Loren M. Naiman, and Thomas A. Papageorge, Deputy District Attorney;
and defendant YouBet appearing through its counsel, Christensen, Miller, Fink Jacobs, Glaser, Weil & Shapiro,
by Robert L. Shapiro, Esq.; and
Plaintiff and defendant having stipulated and consented to the entry of the Judgement prior to the taking of any
proof, and without trial or adjudication of any issue of fact or law herein, and without this Judgement constituting
an admission by defendant regarding any issue of fact or law alleged in said Complaint; and
The Court having considered the pleadings;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that plaintiff have judgement against
defendant as follows:
JURISDICTION
1. This action is brought under the laws of the State of California and this Court has jurisdiction of the
subject matter hereof and the parties hereto.
APPLICABILITY
2. Except as otherwise specifically provided, the provisions of this Judgment are applicable to defendant
YouBet, and to its officers, employees, agents, representatives, and successors.
INJUNCTION
3. Defendant You.Bet and all those persons and entities described in paragraph 2 of this judgment are
permanently enjoyed and restrained from engaging in or performing, directly or indirectly, any of the following
acts:
a. Engaging in pool selling and bookmaking in California, in violation of the laws of the State of California;
b. Recording or registering in California any bet or wager upon the result of any trail or contest of skill,
speed and power of endurance of man or beast, in violation of the laws of the State of California;
c. Keeping or occupying any room, building or other property in California for the purpose of registering or
recording any bet or wager upon the result of any trial or contest of skill, speed and power of endurance of man
or beast, in violation of the laws of the State of California;
d. Offering or accepting any bet or wager upon the result of any trial or contest of skill, speed and power of
endurance of man or beast, in violation of the laws of the State of California;
e. Accepting any payment or money from any California resident tendered or paid to defendant by a
California resident for the purpose of parimutuel betting or to open an account for the purpose of participating
in off-track parimutuel betting through defendant You.Bet or its partners or associates, in violation of the laws of
the State of California; provided that nothing in this Final Judgment Pursuant to Stipulation shall prohibit
defendant from accepting memberships or subscriptions for services to California residents which are in
accordance with the laws of the State of California, or from receiving compensation from California residents
for such lawful services;
f. Failing to return, with 30 days of the date of entry of this judgment, any payment, money or gaming
account funds, presently held by defendant YouBet, which were tendered to or through defendant YouBet for the
purpose of placing off-track parimutuel bets for California residents in violation of the laws of the State of
California;
g. Making any untrue or misleading statement in connection with the sale or attempted sale of Internet
gaming services to California residents, in violation of Business and Professions Code section 17500,
including, but not limited to, any statement that the services of defendant are in full compliance with the laws of
the State of California, if in fact the services of defendant offered to California residents are in violation of the
laws of the State of California;
h. Providing any service to a California resident whereby such resident places wagers through defendant's
facilities in violation of the laws of the State of California; provided that nothing in this Final Judgment Pursuant
to Stipulation shall prohibit defendant from accepting memberships or subscriptions for services to California
residents which are in accordance with applicable laws of the State of California, or from receiving
compensation from California residents for such lawful services;
i. Failing to perform a check for California residence of any applicant for service, membership or
subscription in the parimutuel wagering system offered by defendant;
j. Failing to transmit promptly, to any California applicant for service, membership or subscription in
defendants' system involving parimutuel betting through the Internet, an electronic message as follows: "The
YouBet.com system is not available to California residents for the purpose of transmitting instructions
concerning wagers." Defendant shall also, within 48 hours of sending any such electronic message, transmit by
U.S. mail a written copy of that notice to the potential participant, provided that the mailing address of the
potential participant is known to the defendant. Defendant shall keep and maintain records of all such
applications and rejection notices, whether electronic, written, or verbal, involving California residents, and shall
maintain such records, for a period of five years from the dates of their creation, for inspection upon demand by
employees of the Los Angeles County District Attorney's Office.
k. Failing to post within two days of the date of entry of this Judgment, or failing permanently to maintain, on
any Internet Website maintained by defendant which Website offers sports information services to which a
California resident may subscribe, a notice clearly and conspicuously disclosing the following: "California
residents may not utilize the YouBet.com system to transmit wagering instructions."
COMPLIANCE
4. For the purpose of ensuring compliance with the injunctive provisions of this Final Judgment, defendant
shall permit duly authorized representatives of the District Attorney of Los Angeles County, after reasonable
notice and at reasonable times and places, to interview agents, employees or representatives of defendant
YouBet regarding any matter contained in this Final Judgment.
MONETARY RELIEF
5. On the date of entry of this Judgment, defendant YouBet shall pay the sum of $1,308,250 (one million
three hundred eight thousand two hundred and fifty dollars) as the monetary relief in this matter. Of that total:
(a) The sum of $208,250 shall be paid as costs of the investigation and prosecution of this matter. Of this
sum:
(1)$60,000 shall be as costs of the Los Angeles County, and shall be paid by certified check made
payable to "District Attorney of Los Angeles County;"
(2)$90,000 shall be as costs of the Los Angeles Police Department, and shall be paid by certified check
made payable to "Los Angeles Police Department;"
(3) $53,250 shall be as costs of the Los Angeles County/Orange County High Technology Task Force, and
shall be paid by certified check payable to "Los Angeles County/Orange County High Technology Task Force;"
and
(4) $5,000 shall be as costs of the Federal Bureau of Investigation, and shall be paid by certified check
payable to "Federal Bureau of Investigation." All the checks specified in this subparagraph shall be delivered to
Thomas A. Papageorge, Head Deputy District Attorney, Consumer Protection Division, Los Angeles County
District Attorney's Office, 201 N. Figueroa St., Room 1600, Los Angeles, California, 90012.
(b) The sum of $600,000 shall be paid as civil penalties pursuant to Business and Professions Code
sections 17206 and 17536. This sum shall be paid by certified check made payable to "District Attorney of Los
Angeles County" and shall be delivered to Thomas A. Papageorge, Head Deputy District Attorney, Consumer
Protection Division, Los Angeles County District Attorney's Office, 201 N. Figueroa St., Room 1600, Los
Angeles, California, 90012;
(c) the sum of $500,000 shall be paid as cy pres restitution pursuant to Business and Profession
Code section 17203.The total of $500,000 shall be distributed as follows:
(1) A contribution, in the total amount of $300,000 to the Los Angeles County Education Foundation to be
used solely for the purchase of computer equipment for the Los Angeles County Office of Education (LACOE)
for use by students to aid their learning in the LACOE Divisions of Alternative Education, Special Education,
and Juvenile Court and Community schools. These funds shall be used exclusively for this purpose, and shall
be expended in addition to, and not in supplantation of any expenditures for computer equipment made or
planned by the Los Angeles County Office of Education in its current budget, and without any reduction in that
budget to compensate for the receipt of these restitutionary funds. This sum shall be paid by certified check
made payable to "Los Angeles County Education Foundation,"
(2) A contribution in the amount of $200,000 to the California Council on Problem Gambling, Inc., to
support its statewide efforts in counseling, public education, training and certification of compulsive gambling
counselors and prevention of problem and compulsive gambling among California adults and children. This
sum shall be paid by certified check made payable to "California Council on Problem Gambling, Inc." All
payments specified in subparagraph (c) shall be delivered to Thomas A. Papageorge, Head Deputy District
Attorney, Consumer Protection Division, Los Angeles County District Attorney's Office, 201 N. Figueroa St.,
Room 1600, Los Angeles, California, 90012
RETENTION OF JURISDICTION
6. Jurisdiction is retained for the purpose of enabling any party to this Judgment to apply to this Court at
any time for such further orders and directions as may be necessary or appropriate for the construction or
carrying out of this Judgment, for the punishment of violations hereof.
7. This Final Judgment, including the permanent injunction terms contained herein, shall take effect
immediately upon the entry hereof.
DATED:
JUDGE OF THE SUPERIOR COURT