It took a little while to get our hands on the documents but we thought you might be interested in some of the details of a volley of suits between the State of Wisconsin and World Wide Web Casinos.
Some of you may remember that at a May, '97 meeting of the North American Gaming Regulators Association (NAGRA), WWW Casinos attorney picked what many thought was an inopportune time to draw a line in the legal sand in the U.S. From a podium in front of the regulators, he announced that the company was filing suit against the State of Wisconsin asserting their right to operate an internet gambling site out of that state.What ensued was a countersuit from the State against WWW Casinos.
The result of the flurry of suits was a settlement agreement which is included here.
IGN notes that WWW Casinos is also encountering some other legal troubles and is working on a related story about the company. Watch for it soon.
STATE OF WISCONSIN
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ON-LINE INTERNATIONAL, INC.
a Wisconsin corporation,
Plaintiff,
v. Case No. 97-C-0706-S
TOMMY G. THOMPSON, Governor, as
Governor of the State of
Wisconsin, and JAMES E. DOYLE,
Attorney General, as Attorney
General of the State of
Wisconsin,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
STATE OF WISCONSIN,
Plaintiff,
v. Case No. 97-C-741-S
ON-LINE INTERNATIONAL, INC.
and WORLD WIDE WEB CASINOS, INC.,
Defendants.
CONSENT DECREE, ORDER TO DISMISS,
ORDER TO DISSOLVE CORPORATION,
PERMANENT INJUNCTION AND JUDGMENT
Based on all of the files, records, and proceedings had in the above-entitled action, as well as the Stipulation between the parties to this action, and the court being fully informed in the premises,
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1. That the Stipulation which is annexed to this Consent Decree, Permanent Injunction and Judgment is approved and is incorporated into this Consent Decree, thereby making the Stipulation a part of the order and judgment of this court.
THE PARTIES
2. On-Line International, Inc. ("On-Line") is a corporation organized and existing under ch. 180, Wis. Stats., with its principle place of business located at 200 East Sandpointe Ave., Suite 200, Santa Ana, California 92707. On-Line’s initial registered agent is Robert L. Sherry, with an initial registered office located at 633 West Wisconsin Ave., Suite 408, Milwaukee, Wisconsin 53208. Peter Michaels is Chief Executive Officer and President of On-Line.
3. World Wide Web Casinos, Inc. ("WWWC") is a corporation organized an existing under the laws of the state of Nevada, with its principal place of business at 200 East Sandpointe Ave., Suite 200, Santa Ana, California 92707. Peter Michaels is Chief Executive Officer of WWWC.
4. Tommy G. Thompson is Governor of the state of Wisconsin.
5. James E. Doyle is Attorney General of the state of Wisconsin.
ORDER TO DISMISS
6. The action entitled On-Line International, Inc. v. Thompson & Doyle, Case No. 97-C-0706-S, is hereby dismissed, on its merits and with prejudice, and without costs to any party.
ORDER TO DISSOLVE CORPORATION
7. Pursuant to secs. 180.1430 and 784.04, Wis. Stats., On-Line International, Inc., a Wisconsin corporation, is hereby ordered dissolved. This dissolution is effective on the date this Order is signed by the court.
8. Pursuant to sec. 180.1433, Wis. Stats., the clerk of this court shall deliver to the Wisconsin Department of Financial Institutions a certified copy of this Order.
PERMANENT INJUNCTION
9. On-Line and WWWC, by their officers, employees, agents and successor corporations, are permanently enjoined from participating in, or soliciting others to participate in, any of the following activities:
a. Forming any new Wisconsin corporation for the purpose of operating any internet gambling website, whether in Wisconsin or elsewhere.
b. Operating any internet gambling website in Wisconsin.
c. Operating any website, or providing technical and other support to persons, corporations or enterprises known to On-Line or WWWC to offer, or which plan or intend to offer, internet gambling or other gambling to persons physically located in the State of Wisconsin, unless a court with jurisdiction over Wisconsin rules that such operation or other described activities are legal. This injunction continues in full force and effect if such court decision is stayed pending an appeal.
d. Providing technical and other support to persons, corporations or enterprises known to On-Line and WWWC to represent, or which plan or intend to represent, directly or by implication, that it is legal for persons physically located in Wisconsin to participate in gambling via the Internet or other remote communications technology.
e. Operating any website or providing technical and other support to persons, corporations or enterprises known to On-Line or WWWC to accept, or which plan or intend to accept, wagers at any internet gambling site, from residents or players physically located in Wisconsin.
f. Operating any website or providing technical and other support to persons, corporations or enterprises known to On-Line or WWWC to make, or which plan or intend to make, withdrawals and pay-outs associated with any internet gambling site, directly or indirectly, to any person with a Wisconsin address, or on behalf of any person to any financial institution with a Wisconsin address or to any credit card company or other payment mechanism where the address of the cardholder, owner or other person with access is a Wisconsin address.
10. The terms of this permanent injunction may be enforced by the filing of a motion, timely served upon the opposing party(ies), together with supporting documentation, including sworn affidavits. If Wisconsin is required to seek enforcement of this injunction in court, or to seek a finding of contempt of court based upon the contents of this injunction, and if Wisconsin prevails in that enforcement action, On-Line and/or WWWC, as the case may be, shall be responsible for all costs and fees incurred by Wisconsin in regard to such enforcement activity.
11. Construction of this consent decree, permanent injunction and judgment shall be under Wisconsin law.
12. The clerk of this court is ordered to enter judgment accordingly.
Dated this ____ day of _____________, 1998.
BY THE COURT:
Honorable John C. Shabaz
District Judge
JUDGMENT
Let judgment be entered upon the foregoing this ____ day of ______________, 1998.
Clerk/Deputy Clerk of Court
This is on c
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ON-LINE INTERNATIONAL, INC.
a Wisconsin corporation,
Plaintiff,
v. Case No. 97-C-0706-S
TOMMY G. THOMPSON, Governor, as
Governor of the State of
Wisconsin, and JAMES E. DOYLE,
Attorney General, as Attorney
General of the State of
Wisconsin,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
STATE OF WISCONSIN,
Plaintiff,
v. Case No. 97-C-741-S
ON-LINE INTERNATIONAL, INC.
and WORLD WIDE WEB CASINOS, INC.,
Defendants.
SETTLEMENT AGREEMENT
State of Wisconsin, Tommy G. Thompson, Governor of the State of Wisconsin, James E. Doyle, Attorney General of the State of Wisconsin, by their attorneys, James E. Doyle, Attorney General, and Alan R. Kesner and Paul L. Barnett, Assistant Attorneys General, and On-Line International, Inc., and World Wide Web Casinos, Inc., pro se, hereby enter into the following Settlement Agreement as a full and final resolution of this litigation.
THE PARTIES
1. Wisconsin is a sovereign state. The people of Wisconsin, through their duly elected legislature, have enacted certain criminal, consumer protection and other laws that are enforceable in the name of Wisconsin through civil actions.
2. Tommy G. Thompson is the Governor of the state of Wisconsin.
3. James E. Doyle is the Attorney General of the state of Wisconsin.
4. On-Line International, Inc. ("On-Line") is a corporation organized and existing under ch. 180, Wis. Stats., with its principle place of business located at 200 East Sandpointe Ave., Suite 200, Santa Ana, California 92707. On-Line’s initial registered agent is Robert L. Sherry, with an initial registered office located at 633 West Wisconsin Ave., Suite 408, Milwaukee, Wisconsin 53208. Peter Michaels is Chief Executive Officer and President of On-Line.
5. World Wide Web Casinos, Inc. ("WWWC") is a corporation organized an existing under the laws of the state of Nevada, with its principal place of business at 200 East Sandpointe Ave., Suite 200, Santa Ana, California 92707. Peter Michaels is Chief Executive Officer of WWWC.
WISCONSIN’S CONTENTIONS
6. In Wisconsin, an enterprise may incorporate under ch. 180, Wis. Stats., for the purpose of engaging in any lawful business. A corporation engaging in a business that is the subject of regulation under another statute of Wisconsin may incorporate under ch. 180, Wis. Stats., only if not prohibited by and subject to all limitations of the other statute.
7. Articles of incorporation for On-Line were filed in the office of the Wisconsin Department of Financial Institutions on November 20, 1997. Attached as exhibit A is a copy of the articles of incorporation for On-Line. The Wisconsin Department of Financial Institutions is located at 345 West Washington Ave., Madison, Wisconsin, in Dane County and the Western District of Wisconsin.
8. Under Wisconsin law, corporate existence ordinarily begins at the close of the day that the articles of incorporation are received by the Department of Financial Institutions. Secs. 180.0123 and 180.0203(1), Wis. Stats.
9. In correspondence dated November 25, 1996, WWWC announced that the purpose of On-Line would be to manufacture, transfer commercially and possess with intent to transfer gambling devices, establishing a gambling place and engage in commercial gambling activities in Wisconsin. WWWC further stated that its planned "Oak Creek facility will house the entire operation of World Wide Web’s new company, which is engaged in high-tech, cutting edge technology aimed toward internet gambling. On-Line will research and develop computer hardware and software and distribute software. The servers for on-line gambling will also be located in Oak Creek." Attached as exhibit B is a copy of the November 25, 1996, correspondence.
10. Wisconsin contends that the activities intended and directed toward fulfillment of the announced purposes of On-Line would violate numerous provisions of ch. 945, Wis., Stats., including but not limited to secs. 945.02(3), 945.03(1), (2), (4)-(7), 945.05(1)(a) and (b), Stats.
11. Wisconsin further contends that the establishment of a gambling place, the announced primary purpose for On-Line, would also constitute a public nuisance under sec. 823.20, Wis. Stats.
12. Wisconsin further contends that, since On-Line was not incorporated for a lawful purpose, it holds its corporate franchise unlawfully.
13. Wisconsin further contends that, since ch. 180, Wis. Stats., does not require that articles of incorporation or applications for a certificate of authority filed with the Department of Financial Institutions provide a statement of corporate purpose and, furthermore, the Department of Financial Institutions lacks authority to determine whether a domestic or foreign enterprise that files either articles of incorporation or a certificate of authority is a public nuisance or illegal activity, declaratory and injunctive relief is necessary to avoid the need to bring suit repeatedly.
ON-LINE’S AND WWWC’S CONTENTIONS
14. On-Line intended to locate a server and develop software in Wisconsin to provide internet casino gambling to customers located in countries outside of the United States where gambling is legal.
15. On-Line would not have accepted bets from residents of Wisconsin, or of the United States, or United States territories or possessions.
16. In anticipation of establishing its headquarters in Wisconsin, On-Line corresponded with Governor Thompson, and its representatives met with representatives of the Wisconsin Department of Justice to discuss On-Line’s plans.
17. On-Line contends that Wisconsin’s gambling laws are not applicable to On-Line’s enterprise because Wisconsin lacks standing and an interest to protect citizens of foreign countries.
18. On-Line further contends that application of Wisconsin’s gambling laws to On-Line is an intrusion into the power of the United States under the Commerce Clause to "regulate commerce with foreign Nations[.]" U.S. Const. Art. I, § 8, cl. 3.
19. On-Line further contends that enforcement by Wisconsin of its gambling laws conflicts with Congressional preemption of the regulation of interstate and foreign gambling regulation.
STIPULATION
20. On-Line and WWWC agree to submit to the jurisdiction of this court.
21. On-Line agrees to judicial dissolution of the corporation pursuant to secs. 180.1430 and 784.04, Wis. Stats.
22. Pursuant to sec. 180.1406, Wis. Stats., On-Line represents that, to the best of the knowledge of its officers, employees and agents, there are no claims presently pending or contemplated against On-Line with the exception of this litigation.
23. On-Line agrees to dismiss its lawsuit, case no. 97-C-0706-S, against Governor Thompson and Attorney General Doyle, on its merits and with prejudice, but without costs to any party.
24. Wisconsin agrees to waive any request or entitlement to a civil forfeiture or to an award to Wisconsin of its costs, including attorneys fees, of prosecuting its lawsuit, case no. 97-0741-S, based upon any of the acts or omissions as alleged in the complaint filed in that action. The parties understand that this waiver does not extend to any future violations of Wisconsin’s criminal, consumer protection and/or public nuisance laws by On-Line, WWWC, their officers, employees, agents or successor corporations, or to any motion or other action taken on behalf of Wisconsin to enforce the terms of this stipulation or the consent decree, permanent injunction and judgment.
25. Wisconsin further agrees that, if any press release is issued by the Department of Justice concerning the resolution of this litigation, a copy of the press release shall be delivered to On-Line and WWWC via facsimile simultaneously with its release to the public.
26. The parties have reviewed the terms of the Permanent Injunction, as set forth in the separate document to be presented for the Court’s signature, and agree to the entry of that Permanent Injunction.
27. The parties agree to the entry by the court of a consent decree that incorporates the terms of this document.
28. By signing this document, the parties acknowledge that they have reviewed this document and the consent decree, permanent injunction and judgment in their entirety, and that they have had the opportunity to confer with legal counsel and other advisors, if they wish, so as to be fully informed. All parties enter into this stipulation knowingly, understandingly and voluntarily.
29. Peter Michaels expressly represents that, as chief executive officer and president of On-Line, and chief executive officer of WWWC, he is authorized to execute this stipulation on behalf of both On-Line and WWWC.
30. The parties agree that the court may enter the consent decree without further notice to, appearance by or consent of the parties or their attorneys.
Dated at Madison, Wisconsin, this ____ day of April, 1998.
JAMES E. DOYLE
Attorney General
_____________________________
PAUL L. BARNETT
Assistant Attorney General
State Bar No. 1008145
Attorneys for State of Wisconsin, Tommy G. Thompson and James E. Doyle
Wisconsin Department of Justice
Post Office Box 7857
Madison, Wisconsin 53707-7857
(608) 266-5366
Dated at Santa Ana, California, this ____ day of April, 1998.
ON-LINE INTERNATIONAL, INC.
_____________________________
Peter Michaels
Chief Executive Officer and President
WORLD WIDE WEB CASINOS, INC.
_____________________________
Peter Michaels
Chief Executive Officer