Discover Says No to Online Gambling

30 May 2001
It took almost a year, but a clear message has been sent to online gambling operators and gamblers in California: Discover Card will not be involved in online gaming for the next three years.

The credit card company entered into a court ordered agreement last week that will prevent it from operating merchant accounts with companies running online casinos that may do business with California residents.

Frederick Marino, an online gambler who racked up more than $70,000 in wagering dept (losing his house and his wife in the process), sued both Discover and American Express two years ago on behalf of the state's residents. He eventually struck deals with other credit card companies he had used for online wagering.

Discover has agreed to relieve him of the $700 he charged on his Discover card and pay $2,000 in attorney's fees. A trial is set to start early next year regarding the more than $10,000 wagered through his American Express card, according to Ira Rothken, Marino's attorney.

Although the monetary value of the deal isn't exorbitant in Marino's favor, Rothken says the principle of the agreement is more important.

"We have been at this for over a year now," he said. "We have a judgment against them and that is much more valuable than them changing their policy or something like that."

Rothken says that , through the court order, making sure the company maintains the standard will be a much easier task.

"If this was something they just decided to do on their own there would be no recourse if they decided to change the policy," he said. "This is something the courts ordered and the ramifications will be great if Discover doesn't obey those rules."

Rothken is hoping the agreement will encourage other credit card companies to crack down on Internet gambling.

"I think to a certain extent it's a benefit for everyone," Rothken told the Associated Press. "There's a lot of injury that happens to people from using credit cards for Internet gambling."

Rothken downplayed the fact that Marino had run up a gambling debt he couldn't afford. "That's not what this case is about," he said. "The greater evil is the credit card companies trying to make money off of people gambling online."

Because it's difficult to discern whether a casino client is a California resident, the case could prohibit almost any wagering site from having a Discover Card account--something the company is already trying to do on its own.

Discover Card said it's had a policy for years to not do business with any site that it knows participates in online gambling. If the company finds out that one of its merchants is running an online casino, it pulls the account.

Click here to view a copy of the Marino settlement.