08 January
2003
Eversheds e80
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The e-news service from Eversheds - Business Lawyers in Europe
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Online Gambling
A New Orleans case which could have had a severe effect
on online gambling
was dismissed by an appeal court at the end of last year.
The gamblers concerned, Larry Thompson and Laurence Bradley,
filed a class
action law suit in 2000 against Visa, Mastercard and the banks that issued
their credit cards arguing that they were guilty of racketeering for
engaging in a worldwide illegal gambling system by allowing them to gamble
online. Using a Mastercard, Thompson bought gambling credits for online
casinos and lost just under £1,000 and Bradley used a Visa card
and lost
the equivalent of almost £4,500. They sought damages and judgement
saying
that their gambling debts were illegal and unenforceable.
The appeal panel dismissed the action saying that Thompson
and Bradley
"got exactly what they bargained for - gambling "chips"
with which they
could place wagers."
The class action from which Thompson and Bradley
were selected involved
another 31 virtually identical cases and, if successful, was likely to
have opened up the floodgates for similar litigation. The appeal court
do
seem to have thought it significant however that the credit card payments
were used to buy chips rather than to gamble directly. Sites which use
credit cards to gamble rather than to buy credit may not fair so well
in a
similar action. The decision will however still be welcomed by credit
card providers who have had a difficult time, particularly in America,
with online gambling as our e80 article on the actions of the New York
Attorney General Eliot Spitzer showed back in June. There may however
be
more storm clouds on the horizon for online gambling with the passage
of a
Bill through Congress in the US to make it illegal to use credit cards
or
any form of electronic payment for offshore gambling. This Bill, HR 556,
had its passage delayed by the recent US elections but passed Congress
in
October.
Jonathan Armstrong
jonathanarmstrong@eversheds.com
Direct dial: 0115 841 7642
More contact details are at
http://www.eversheds.com/about/Offices/officeDetails.asp?idOffice=17
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