Does Washington Really Need to Make Betcha.com Illegal?

NOTE: The below piece is one I penned for publication in any of the state newspapers. Although they published one of my pieces a few years ago, it isn’t easy to get the papers to accept publication. Unless and until I get a taker, I’ll post it here.

This week, the state House of Representatives is considering a bill that would broaden the legal definition of gambling to make the company I founded, Seattle-based Betcha.com, illegal. Supported by the Washington State Gambling Commission and Sen. Margarita Prentice, SB 6103 flew through the state Senate in less than two weeks. The House of Representatives can put a stop to this latest chapter in the state government’s persecution of its own. It should.

Betcha’s story to date would bring a smile to the face of any Third World despot. A few years ago I came up with the idea of a social betting network – think Ebay meets Facebook in Las Vegas. All wagering was honor-based; bettors were not obligated to pay their losses, but if they didn’t they risked receiving negative feedback. I researched the law for months, raised capital, opened an office, and hired employees to develop a website. Thirteen days after we launched, the WSGC told me to shut down or else. When I sued for the right to operate, the WSGC enlisted authorities in Louisiana to teach me a lesson in who’s boss. Two months later, Governor Gregoire, who yesterday wagered very publicly on the Gonzaga-North Carolina game, extradited me and two Betcha employees to Louisiana as felony fugitives, even though she knew or should have known we’d never been to the Bayou State and had a lawsuit pending over the legality of the very action for which we were being extradited. Three trips to jail and sixteen months later, a state Court of Appeals ruled I was right all along; that there was “no logical basis” to believe Betcha bettors were gambling; that the WSGC’s position was contradicted by the “plain language” of the Gambling Act and its own literature; and that Betcha lacked “the essence” of gambling. The WSGC is appealing its loss to the state supreme court.

SB 6103 pushes an already gruesome story into Pulp Fiction territory, and for no reason. Betcha’s upside is extreme. According to a 1999 estimate, Americans casually wager roughly $400 billion annually amongst themselves on sports alone. Betcha would tap into that money pot as well as the billions now being bet on pop culture staples like American Idol and the Academy Awards. People will continue to wager; all 6103 would do is keep Washingtonians from capitalizing on it. No doubt some enterprising entrepreneur in a free state will steal the idea, thanking the Washington legislature all the way to NASDAQ. The tax dollars that would flow into Washington’s treasury will flow to some other state.

There’s no need for SB 6103, either. Given Betcha’s story to date, no entrepreneur considering a business that even rhymes with online gambling would stay here. Tribal interests don’t need protecting: Betcha offers none of the games their casinos offer, and since our focus is global, the customer overlap is minimal. SB 6103 is not needed to prevent an increase in bookmaking: as a person-to-person betting exchange, Betcha cuts out the bookmaker. Because Betcha’s customers may opt out of their bets (that’s the “honor-based” part), they won’t lose the rent money. And judging by the public support for the 2006 law that turned online gamblers into Class C felons – that is, none (1I2I3) – the people of Washington wouldn’t support SB 6103 if they knew about it.

If nothing else, the legislature should back off 6103 to keep from making dubious history. To my knowledge, no state legislature has ever changed the law specifically to put one of its own out of business, at least not without the urging of either the competition or the public. Lawmakers can at least wait until the judicial process runs its course. Governor Gregoire couldn’t wait. The legislature need not repeat her mistake.