Attempt to Dodge State Internet Gambling Laws Fails

September 6, 2010 (CAP News Wire) – In an effort to push the boundaries of online gambling legality in the United States, one Internet gaming site came up with a new kind of online gambling back in 2007., based in Washington state, offered online gamblers the chance to gamble with each other, but did not itself accept any money for the bets.

“For a fee, someone could post a bet on anything from sporting events to astronomical occurrences to Jenkins’ site,” explains the Seattle Weekly. “If someone accepted it, Betcha held the money for both parties. For 72 hours after the winner was decided, the loser had the option of hitting a button saying ‘I Wanna Welch.’ Hit that button and the bet was off.”

“But since the winner could only assume she might get paid, Jenkins contended, his site was perfectly legal.”

The state’s authorities, however, don’t agree. Recently, the site was shut down, and last week, the state Supreme Court withheld the decision to keep it shut down.

“[A]ll gambling involves betting, but not all betting involves gambling,” argued Nick Jenkins, the site’s founder, in the case. The state disagreed, deciding that just “facilitating bets makes you a bookie, even if you don’t participate in the bets themselves”.

More importantly to the national online gambling legalization and regulation drive is this part of the case: Attorney Marc Randazza has stated that, even if Seattle-area United States Representative Jim McDermott’s efforts to regulate Internet gambling are successful, will remain illegal, since it “would not overturn state laws that ban the practice outright.”

“The federal government isn’t going to tell the states whether they can have gambling or not,” Randazza said.

This adds an important element to the fight to legalize and regulate online gambling in the U.S., and it may provide fuel for those parties who’d prefer to see it done on a state-by-state basis rather than on a federal level. It’s even more relevant to the online affiliate industry when you recall that state online gambling networks are likely to exclude most of the big-name online gambling brands that casino affiliates promote.