Posted on 07/10/2007 11:40:09 AM PDT by microgood
Washington State Gambling Commission investigators seized computers from a new Seattle-based Internet-betting site Monday, claiming the business violated the state's 2006 online gambling ban -- a contention the site's founder strongly disputes.
Agents with a search warrant confiscated laptops and computer monitors before Betcha.com's seven employees arrived to work in the company's North Seattle office.
Founder and Chief Executive Nick Jenkins found out about the raid from his wife, who had stopped by the North 56th Avenue workplace before business hours and found investigators inside.
"This is ridiculous," Jenkins said. "I'm going to fight it. I don't like the heavy-handed state coming down on entrepreneurs."
Jenkins is seeking a restraining order against the state, with a hearing in Thurston County scheduled for Tuesday. Susan Arland, the commission's spokeswoman, confirmed that the company's computers were seized but declined further comment.
The dust-up comes three days after Renton attorney Lee Rousso filed a lawsuit claiming the state's effort to suppress online gambling such as poker was an illegal breach of the Constitution's interstate trade protections. The disputes are among several in the nation as state and federal regulators struggle to limit or ban popular, elusive Internet-based gambling sites.
Jenkins' fight with the state is different than Rousso's. He is not challenging the legality of the state ban; instead Jenkins says Betcha.com simply isn't governed under the ban approved by the Legislature last summer.
Modeled, in part, after eBay, Betcha.com provides a forum for people who want to make bets against each other on almost any topic, such as who will hit the first All-Star game home run or who will win an Oscar.
Bets are not guaranteed. Similar to the popular online auction site, individual bettors receive customer ratings based on payouts. Because there is no guarantee of payment upon winning -- Betcha.com does not accept or back bets -- it doesn't meet the legal definition of gambling and thus isn't illegal, Jenkins said.
Jenkins, a 38-year-old 1994 Georgetown Law School graduate, said he spent months researching gambling laws in each state and at the federal level.
"This is an honor-based betting platform," he said. "How can you be gambling under a legal definition if you don't have to pay when you lose?"
The idea for Betcha.com came to Jenkins in 2003 when a friend declined to pay after losing a golf wager. Jenkins wondered if it would be possible to set up an online community with like-minded bettors and a rating system to identify the safe bettors.
After assembling a team of investors and putting his own money on the line, he did a soft launch of the site three weeks ago, "to work on the bugs." Soon after, he was contacted by the state. Two weeks ago, he explained his legal rationale to commission attorneys.
On Friday, the Gambling Commission summoned Jenkins to Lacey to talk about his Web site. The meeting was quick.
"They said shut it down or else," Jenkins said. "I told them the law doesn't apply to us. They said the law is a matter of interpretation."
The same day, Jenkins filed his lawsuit seeking to stop the state from applying the Internet gambling law to Betcha.com
The search warrant came three days after Jenkins and the state failed to reach agreement on the site's legal status.
He said the commission has lost perspective on which laws it should enforce and upon whom.
"When you are a hammer, I guess everything looks like a nail," he said.
P-I reporter Mike Lewis can be reached at 206-448-8140 or mikelewis@seattlepi.com.
But it can't make something retroactively illegal either. Not in the US anyway.
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