commentary, gambling

Betcha's Saint Nick fights cops, courts, Congress… and wins (for now)

19 Comments

Surely no legislature would craft an entire bill just to outlaw one person’s as-yet unprofitable small business?

So when Nick Jenkins, founder of Betcha.com, calls a proposed Washington State law the “Kill Betcha.com Act”, certainly he must be exaggerating, paranoid or both, right?

Actually not. I read the bill, and indeed its sole purpose seems to be to redefine gambling so as to make Jenkins’s company illegal.

First some background. About two years ago, Jenkins, a crazybrilliant lawyer turned entrepreneur, started Betcha.com in Washington State, where gambling is illegal. Betcha.com was a peer-to-peer betting site with a huge caveat: losers didn’t have to pay if they didn’t want to. Because they weren’t necessarily risking money, they weren’t gambling. The Washington State authorities were not amused; they raided the company and jailed Jenkins & co, even extraditing them to Louisiana over seventy cents.

Then, in February 2009, the tide began to turn. Reversing a lower-court decision, the Washington State Court of Appeals vindicated Jenkins and his business model: Honor-based betting was not gambling. The former lawyer had done his homework well and, sure enough, was right all along.

So, some Washington State politicians decided to put the honor back into gambling. They proposed to redefine a bet as risking money on the understanding that you “will or may receive something of value” if you’re right, adding in the crucial two new words “or may”. So far, two attempts to pass the revised wording have stalled, keeping hope alive for an eventual resurrection of Betcha.com.

Apparently Washington State has a history of extreme positions on gambling, including outlawing writing about or linking to gambling websites, despite the standard hypocrisies of supporting state lotteries, horse racing, and Indian casinos.

Jenkins’s new mission is to keep the governor who turned him over to Louisiana authorities off the Supreme Court should Obama nominate her. Christine Gregoire couldn’t have gained a more tenacious and law-savvy enemy.

Thank you Nick Jenkins for continuing to fight when most would have given up long ago. Your hard work and sacrifice brings desperately needed clarity to gambling laws and paves the way for US gamers to someday get the products they want.

19 thoughts on “Betcha's Saint Nick fights cops, courts, Congress… and wins (for now)”

  1. You want clarity on the situation involving gambling in Washington State?
    Politicians are always clear on one thing: they know where their campaign funds come from.
    Indian interests are powerful in Washington State. Not just tribal reservations and extended environmental control zones, but fishing rights that extend well beyond subsistence to embrace full commercial fishing. And ofcourse then you add in the real kicker: Indian Gambling.
    If Betcha.com was perceived as a threat to Indian income streams it was a threat to re-election campaign funds. So a phone call went out from Caesar Augusta and behold: For 79 cents of interstate gaming a conspiracy was born!
    There. You wanted clarity. You got clarity!
    You want more clarity?
    I think somebody must have said “He ain’t dead yet.” and the reply was “Finish him but good or we will have to deal with others!”
    There … that enough clarity?

  3. Panos: thanks. Agreed: gambling and investing are logically equivalent, but socially and legally different.

    The change in wording is actually more subtle. The proposed new language says you “may” (or may not) win something even if you bet correctly. In other words, even if your prediction is accurate (metaphorically, your horse comes in), you might still not win anything. Yet it is still considered gambling according to the proposed new law.

  4. It seems everybody likes to talk about the “old days” in Vegas when the mob ran things and things were run correctly rathern than according to computerized rules.

    Well, lets harken back to the old days concerning “markers” in Vegas: Back in the old days when gambling debt collection was contrary to public policy in any state other than Nevada, the marker collection rate was better than 98 percent. Indeed the casinos had a better collection rate on Markers than Sears had on the famed Sears Card which was then one of the toughest credit cards to obtain.

    So the legal status of the marker as being legally uncollectible made little difference. Men stood by their Markers as a sense of pride in an attitude reminiscent of Damon Runyon’s Guys-and-Dolls.

    And any sort of honorary gambling site wherein losses do not have to be paid would probably have had the same high repayment rate that the legally unenforceable markers used to have.

  5. @Panos, They exempt all kinds of wagering, including investing and fishing derbies.

    Perhaps the ACLU should revoke Senator Prentice’s membership.

    After the law about publishing gambling content, the newspaper continued to print a syndicated poker column.

    Also as Jenkins mentions, it should not be forgotten that Gov. Gregoire openly wagered across state lines. Friendly or not, seems to be in violation of federal law (wire act, sports gambling) and proposed state law.
    http://blog.seattlepi.com/thebigblog/archives/165164.asp

  6. >gambling and investing: logically equivalent, socially and legally different.
    Yes. Only a fool would consider a lottery ticket some sort of investment and no one in their right minds would entrust funds to an investment advisor whose results depended upon the turn of a card or the roll of a pair of dice.
    Ofcourse one wonders just what the state’s motivation actually is in these matters. Some morally reprehensible act? Hardly. Its not just the state’s support of the lottery but the fact that Gregoire’s re-election campaign funds flow from Indian gaming interests. So we are not dealing with some morally reprehensible activity except in obsolete Legislative pronouncements on the matter.

    Is there a bias toward considering prompt results to be gambling versus the slow and steady accumulation of wealth to be the result of investing? Well, movies, trendy restaurants, fashion creations and computer fortunes are often the result of relatively overnight successes, not long term planning or long term application of efforts.

    Yet we do not really dispute there is a fundamental difference between gambling and investing even if we can not precisely define the differences and draw clear lines of demarcation.

    It is the same way with legislative enactments that have a disproportionate impact on identifiable individuals. We understand the politcians will haul out their phrases about ‘the public good’ and ‘the law being applicable to all’ but in reality we really know when legislation is aimed at a particularly person or group. Tax abatements, industrial subsidies, zoning variances and a host of other government actions are often clearly intended to apply to an identifiable few. This subtle change in the law is clearly aimed at Betcha.com and is clearly motivated by a governmntal desire to protect Indian Gaming revenue from all enemies both real and imagined. Its not for the benefit of the public, its for the benefit of the politicians.

  7. Gambling is banned in many states but still it is played for good profit and for many people it is played for earning.

  8. Yes, it is that there is a major difference between investing and gambling even if we can not really define the differences and say clear lines of law.

  12. @Daniel
    “Perhaps the ACLU should revoke Senator Prentice’s membership.

    After the law about publishing gambling content, the newspaper continued to print a syndicated poker column.

    Also as Jenkins mentions, it should not be forgotten that Gov. Gregoire openly wagered across state lines. Friendly or not, seems to be in violation of federal law (wire act, sports gambling) and proposed state law.”

    I couldn’t agree more, especially about the continued print of a syndicated poker column.

  13. If they redefine a bet as risking money, forex trading will become illegal then? I think they should have a way to attach betting and games. But defining ‘bets’ as a money risking scheme is way to far.

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