http://www.lasvegassun.com/sunbin/stories/sun/1998/may/12/507203577.html
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Ruling leaves larger question of online gambling
ST. PAUL (AP) – A Las Vegas company can be sued by the state for
claiming people can bet legally from anywhere in the world on a Web
site, the state Supreme Court ruled, prompting a potential showdown
over gambling boundaries.
The justices let stand Friday a state Court of Appeals ruling
that gave Attorney General Hubert Humphrey III authority to sue a
Las Vegas company for claiming on its Web site that people could
bet legally online “from anywhere in the world.” Humphrey
contends that such gambling is illegal in Minnesota, and he accuses
the company of false advertising.
The state will ask a judge to order the company not to take bets
or solicit business in Minnesota.
A lawyer for the company claimed the site was legal because no
bets had been placed and only information was solicited.
“Wagernet is an idea. At this point that’s all it is,” Eckley
Keach, a lawyer for Granite Gate Resorts Inc., said to the justices
last week.
Minnesota is among several states telling Internet gambling
operators that they can’t take wagers from their residents.
The states say their laws prohibiting sports betting and other
unauthorized wagering apply to the Internet, and argue that
residents wagering from their home or office computers would be
gambling illegally in their states.
Internet gambling proprietors counter that the betting is legal
because it really occurs where they run the businesses – either in
Nevada or in nations that sanction the gambling.
That argument suggests “you can just be magically transported
to someplace else,” said Carolyn Ham, a Minnesota assistant
attorney general.
The ruling marks the first time that a state’s high court has
given a state power to pursue a consumer-protection lawsuit against
an Internet gambling operator in another state or nation, she said.
The justices split 3-3 on the decision. They made no comment on
the case and declined to say who ruled on which side. Justice James
Gilbert did not participate.
Ron Meshbesher, who is representing Rogers, said he may ask the
court to reconsider, given the even split. Their only other option
is to ask the U.S. Supreme Court to hear an appeal.
Granite Gate set up an Internet site called WagerNet to take
sports bets, and an online odds-making service to give information
about point spreads.
When an undercover investigator called Granite Gate president
Kerry Rogers, said he was from Minnesota and asked if the betting
would be legal, Rogers replied, “Absolutely,” according to court
documents.
To use WagerNet, bettors would pay $100 for software and then
deposit at least $1,000 in an account in Belize. Rogers contends
the gambling would occur in Nevada and Belize, not in Minnesota or
other states where it’s prohibited.
In addition to trying to block Rogers from taking bets from
Minnesotans, the attorney general’s suit seeks $25,000 in civil
penalties from him and Granite Gate.
The Web site in question is: http://www.wagernet.com