WIGC Gets Smacked Again

8 August 2000
World Interactive Gaming Corporation (WIGC), an online casino operator that has battled with New York Attorney General Eliot Spitzer since 1998, has been ordered by a New York judge to pay $1.8 million in restitution to defrauded investors, plus a further $4.5 million in penalties.

"This decision is important because it marks the first time that a court has ordered penalties against those involved in illegal Internet gambling," said Attorney General Spitzer. "This case demonstrates that gambling, whether online or offline, is illegal and that promoting this type of activity carries serious legal and monetary consequences."

WIGC's legal woes began in June 1998 when an investigator from Spitzer's office logged onto the company's site, downloaded gambling software, opened an account and wagered. The company had a policy against accepting bets from New Yorkers, but the investigator was able to participate by registering as a Nevada resident.

Charges were brought against the company with subsequent court dates. In a July 1999 decision, State Supreme Court Judge Charles Ramos ruled that WICG had violated state and corporate securities laws by failing to register with the Attorney General's office. The company also failed to disclose to investors that 46 percent of their funds were used to pay salaries, commissions, and consulting fees to the corporation principals. Ramos additionally found that the establishment and operation of the online casino violated state and federal gambling laws (as outlined in his 20-page opinion).

At the time, WIGC officials vowed to fight the decision. CEO Jeff Burton called Ramos' decision "ludicrous" and explained that not only were no wagers handled through their New York computers, no wagers were taken over the company's toll-free phone.

Neither Burton nor officials from Spitzer's office were available for comment on the recent decision.