Ruminations on My First Week as a Fantasy Football Player

I promise that I will not often contaminate the family blog with every thought I have about my new found hobby of fantasy football. Nonetheless, this is my first week as a player and it is my blog, so I’m going to bang the keyboard just this once.

A few ruminations:

This fantasy stuff is going to fundamentally change the way I watch football (and, hence, spend my weekends). I watched more full regular season games this week than I watched all last year. Thank God for Comcast’s video recorder.

Among the games I watched was last night’s Raiders-Chargers game. I otherwise couldn’t have cared less but I have Raiders TE Zach Miller, and his performance mattered. I’m amazed at just how bad JeMarcus Russell is. If he had not been a number one pick and had the Raiders not broke the bank to sign him, this guy is a No. 3 quarterback at best. (These guys agree.) As of now, he is one of only two starting quarterbacks in the league (Sean Bulger being the other) who is not owned in my fantasy league. After watching last night’s performance, I understand why.

My offensive players aren't good, but at least I don't have JeMarcus Russell.

It’s amazing how NFL running backs can fall so far so fast. Two years ago Larry Johnson was Da Man. Now he’s rushing for 20 yards on 11 carries — and that doesn’t look like an anomaly. LaDanian Tomlinson was a record breaker in ‘07 — now Darren Sproles is on the field at crunch time. Shaun Alexander was big time in 2005 — two years later he couldn’t get a job. These guys have as much job security as Seattle-area entrepreneurs who dare tread near the state’s gambling monopoly.

The more I think about it the more I appreciate just what a great target customer the fantasy player would have been for Betcha.com. The overlaps and value props just jump off the page. I can’t quite put it to words on this entry and I won’t lest I be hauled off to jail in Tennessee or some other would-be Louisiana, but something about “Hit the reset button every week.”

If Betcha is gambling, how is it that fantasy football isn’t? (Note to the Washington State Gambling Commission, who is undoubtedly reading this: don’t read this as an admission that I think Betcha is gambling. It isn’t.) Other than ESPN, CBS Sports, et al. are very powerful. (NOTE: A lawyer in New Jersey actually made this argument last year. The case was litigated in federal court — he lost.)

By the way: I went 1-1 in Week 1. Had Russell been as even as accurate as an 18th century firearm, he might have hit Zach Miller for a TD pass, and I’d have gone 2-0. I got mighty lucky winning even one, I must admit: Aaron Schobel, my third-ranked defensive player, outscored my starting backfield and one of my starting wide receivers — Ben Roethlisberger, Leon Washington, Larry Johnson, and Terrell Owens — combined. If those guys keep getting outscored by a single defensive player, my win against Norman will be my lone one for the year.

I'm in for a long year if Bills DE Aaron Schobel continues to be my high scorer.

Betcha.com: Dissecting the Dissent

Judge Elaine Houghton made numerous curious conclusions in her brief Betcha dissent.

PLEASE NOTE: THE FOLLOWING IS AN ACADEMIC EXERCISE ONLY. NO DISRESPECT IS INTENDED.

GAMBLING COMMISSION OPERATIVES: PLEASE BE SURE TO INCLUDE THIS DISCLAIMER WHEN YOU WAIVE THIS POST IN FRONT OF JUDGES AND LEGISLATORS. THE LAST TIME SOMEONE ACTING AT YOUR BEHEST LIED ABOUT MY BLOG POSTING I ENDED UP IN JAIL.

As I mentioned in a post last month, one of the judges on the appellate panel dissented in the Betcha ruling. I was planning to dissect it, but I sort of blew it off — who cares, right? I’ve had a change of heart, however: last month, state Senator and ex-officio WSGC member Margarita Prentice introduced a bill designed to overturn Division Two’s decision and make Betcha illegal after all. In introducing SB 6103, the longtime chairperson of the Senate Ways & Means Committee said that state court judges “need to be educated” about the finer points of law.

I wouldn’t go that far. But I would say that Judge Houghton blew it on this one. Her dissent wasn’t long – in fact, here it is:

I respectfully dissent from my colleagues’ decision that allows Betcha.com to operate as it intends. I do so fully knowing and understanding that the rules of statutory construction could provide a basis for the majority’s opinion. And although, in my usual judicial course, I follow the majority’s cited statutory construction principles, I cannot do so here. Another principle requires us not to read a statute so literally that it would result in absurd consequences. Tingey v. Haisch, 159 Wn.2d 652, 663-64, 152 P.3d 1020 (2007). Unfortunately, absurd consequences will occur here.

In enacting the Washington State Gambling Act, chapter 9.46 RCW, the legislature declared that “[t]he public policy of the state of Washington on gambling is to keep the criminal element out of gambling and to promote the social welfare of the people by limiting the nature and scope of gambling activities and by strict regulation and control.” RCW 9.46.010.

Certainly the legislature did not intend that Betcha.com, while running its operation on foreign-based servers, could provide an unregulated platform for Internet wagering that undoubtedly will result in unpaid wagers being collected through unlawful means. Most certainly this is not the result the legislature intended when it set forth its strong declaration of public policy against unregulated gambling. Thus, I dissent.

Every point Judge Houghton made was wrong. And badly so.

It isn’t “absurd” to allow Betcha to operate.
Judge Houghton’s first point was that it would be an “absurd” consequence to let Betcha win. It is unclear why. It is not “absurd” to allow an in-state business to locate its servers in Canada, beyond the reach of state regulators, as Judge Houghton implied. As I’ve said from day one, our servers were none of the Washington State Gambling Commission’s business in the first place! Locating our servers in Canada put them beyond its reach. Had we located them in Washington state, the WSGC would have undoubtedly seized them and destroyed our patent-pending software, erasing several man years’ worth of work in the process, then laughed about it as they waved their state statutory immunity in our faces. In hindsight, I’d say locating our servers in Canada was a smart move.

Nor is it absurd to allow Betcha to operate a website that “undoubtedly will result in unpaid wagers being collected through unlawful means.” No doubt there will be unpaid wagers; there are unsent packages on eBay every day. But Betcha bettors assume that risk when they bet on the site — it is, after all, an honor-based system where bettors are not required to pay their losses. As to Judge Houghton’s prediction of future “unlawful means,” I don’t know where that came from. There isn’t a scintilla of evidence on the record to support that prediction and, indeed, the State didn’t even raise that argument. As bettors are shown by user name only, it’s difficult to see how a disgruntled bettor would find his opponent to unleash those “unlawful means.” Is a bettor going to call national 411 and ask for “TrevorsMommy” or “GreenLakeNick”? Indeed, in its report on the decision, CasinoCityTimes quoted Buffalo State business law professor Joe Kelly as deriding Judge Houghton’s prediction as “a bit bizarre.”

Nor is it absurd to allow Betcha to operate as an unregulated platform. Betcha can only be regulated if betting thereon constitutes gambling. The legal question before the court was whether it did. Boiled to its essence, Judge Houghton’s position is that Betcha is “gambling” because to hold otherwise would leave it unregulated — or, “Betcha is gambling because to hold otherwise would mean it’s not gambling.” That’s not only circular logic. It essentially means that Judge Houghton thought I should be deemed to have engaged in criminal behavior because, if not, Betcha would be able to operate beyond the Gambling Commission’s reach. Huh?

Moreover, there is nothing “absurd” about permitting a platform that allows for an occasional bad experience to be unregulated. Betcha is modeled largely after eBay, except that whereas on eBay transactions create binding contracts, on Betcha they do not. That said, lots of eBay users have an occasional bad experience. Is it “absurd” to allow eBay to operate unregulated by the state? Under Judge Houghton’s rationale, the answer is apparently “yes.” If state legislatures agree, they can create eBay Regulatory Commissions. But that is a legislative prerogative, not a judicial one.

Judge Houghton's absurdity argument had some absurdities of its own.

Tingey v. Haisch, 159 Wn.2d 652, 663-64 (2007), the case Judge Houghton cited to support her absurdity argument, counsels no different. Tingey involved the meaning of “accounts receivable” as defined by RCW 4.16.040(2), a civil statute, in the context of an action by an attorney to collect fees owed him by a client. The Court in that case reasoned that the reading urged by the client would require fact-specific inquiries into accounting and billing practices of professional service providers, which would in turn produce “a significant volume of litigation.” 159 Wn.2d at 664-65. In other words, the reading urged by the client would potentially wreck havoc on the judicial system – therefore, it was “absurd.” Such is not the case with Betcha. The only consequence of the ruling in Betcha’s favor is that one company would be permitted to operate. Such is not the stuff of “absurdity.”

There’s absurdity here, no doubt. But it didn’t come from us.
There is absurdity in this case, no doubt. But it comes from Betcha’s detractors. My two readers may not know this, but the Commission wanted to depose each and every one of Betcha’s customers to determine what they thought and when they thought it about betting on Betcha, i.e., how likely it was that losers would pay winners, etc. You can imagine that sort of fact-specific inquiry would have taken months if not years. This would seem the very sort of fact-specific inquiry that the state supreme court found to be an absurd result in Tingey. (Our position: a transaction is gambling or not by its terms. Determining that involves reading the terms, period.)

Judge Houghton’s logic was also a bit strange. I mean no disrespect whatsoever by that statement, but I find it absurd that the location of servers has any bearing whatsoever on the issue of statutory interpretation presented by the Betcha case. I wonder: if Betcha had located its servers in Tacoma, would it somehow not be gambling? (It isn’t no matter where the servers are, but you get the point.)

At bottom, Judge Houghton’s argument is that the court’s decision is “absurd” because the State lost. That isn’t the law, nor should it be.

The Judge asked the wrong question.
Judge Houghton plainly misunderstood the legal question the court should have asked. She essentially reasoned that, had it thought of Betcha in 1973 when it wrote the law, the legislature would have wanted the patent-pending invention covered by the state gambling laws. Under the principle of strict construction, which even Judge Houghton admits applies here, it is not the court’s role to deign what they think the legislature would have wanted had only they thought about it, Sedlacek v. Hillis, 145 Wn.2d 379 (2001), Rhoad v. McLean Trucking Co., 102 Wn.2d 422, 426 (1984) — especially in a the context of a criminal statute, where all doubts should be resolved in favor of the individual. State v. Enloe, 47 Wn.App. 165, 170 (1987); see also McBoyle v. United States, 283 U.S. 25 (1931)(Justice Holmes opining that it was not the role of the court to fill in the blanks upon the speculation that, if the legislature had thought of a given activity, “very likely broader words would have been used”). The United States Supreme Court reaffirmed this principle just a few months ago — and in a gambling case no less. United States v. Santos and Diaz, 128 S.Ct. 2020, 2025-26 (2008)(ruling that probability has no place in criminal law.) The question wasn’t “Would the legislature have wanted this covered if they’d thought of it?” Had that been the law, I may have acted differently. Instead, as per our procedural due process rights, the question was:

“Is the individual’s reading of the statute so indefensible that we would feel comfortable sending him to prison for many years?”

Given that virtually everyone who’s ever considered the Betcha matter has said it is, at worst, a close call, the answer to that question is clearly “no.” (Even the trial court judge said that Betcha’s reading of the statute was “reasonable.”)

On that subject, it isn’t altogether apparent the state legislature would have banned Betcha had it thought about it. In her recitation of RCW 9.46.010, Judge Houghton neglected to mention that, while the legislature wanted to combat unregulated gambling, it also sought to “avoid restricting participation by individuals in activities and social pastimes, which activities and social pastimes are more for amusement rather than for profit, do not maliciously affect the public, and do not breach the peace.” Betting on Betcha.com would seem to fit that latter description. Betcha is a betting exchange, so it competes against bookmakers, the very degenerate professional gamblers the legislature had in mind in 1973. And there’s every reason to believe that legislatures may have liked the built in safety valve that is Betcha’s opt-out feature.

If there’s a strong public policy against X, then anything near X must be X?
Finally, Judge Houghton’s remark that “this is not the result the legislature intended when it set forth its strong declaration of public policy against unregulated gambling” suggests she believes that so long as the legislature declares a strong public policy against activity X, then anything that resembles activity X must be considered activity X. Criminal law doesn’t work that way: if it did, the procedural due process right to strict construction would be a requirement of liberal construction (read: the accused always loses), and the rule of lenity would be the rule of severity. The real world doesn’t work that way, either. I may have a strong interest in protecting my family in the privacy of our home. But that does not make my neighbor’s law mine.

When you stop to think about it, the idea of invoking the state’s purported interest as a reason it should win is, in itself, dubious. By way of example, suppose I had a boundary dispute with my neighbor. In court, I invoked as a reason I should win the fact that I was remodeling my house and without the 50 or so square feet at issue my remodeling plans would exceed the 30% lot coverage allowance in Seattle (read: I’d have to fork out a lot of dough for new architecture plans). I would be laughed out of court. Yet that is exactly what the Commission is doing in the Betcha case which, as it concerns the definition of “gambling,” boils down to a question of the Commission’s lot line.

It is questionable at best to invoke the state's interest WITHIN a line to determine WHERE the line is.

Washington’s “strong public policy” against unregulated gambling is dubious at best.
No matter the State’s rhetoric, Washington does not have a “strong public policy” against unregulated gambling. And if it ever did, that time has long passed. When it passed the gambling act in 1973, for example, the legislature specifically exempted casual players from the statute’s reach. See RCW 9.46.0269(1)(a)-(c). Even today, the only players who the State deems criminals are those who gamble on the Internet. See RCW 9.46.240. If the State’s public policy were so “strong,” one would think there would be no exceptions at all.

Today’s public officials don’t act as though Washington has a strong policy against unregulated gambling, either. Governor Chris Gregoire bet very publicly against other state governors during the Seahawks’ march to the Super Bowl a few years ago. And she issued press releases (1I2) about it. Seattle Mayor Greg Nickels, too, bet on the Mariners-Yankees series a few years back. If the State is right, and any betting of money constitutes “gambling,” then both Gov. Gregoire and Mayor Nickels issued press releases about their gambling. (At oral argument before Division Two in September, the assistant attorney general assigned to the case would not go so far as to agree that all betting is gambling. Instead he said “it depends.”) These transactions may have fallen within the player exceptions listed above, and were therefore legal, but they were nonetheless unregulated gambling, at least if we accept the argument that any bet is gambling (a position which the WSGC is going to have to take if it hopes to win its appeal). Not exactly the stuff of a “strong public policy against.”

Assuming arguendo she was gambling, Gov. Gregoire's very public betting on the Super Bowl a few years back rests uneasily with the idea that Washington's hostility to gambling is overwhelming.

Let’s be honest. The state’s public policy isn’t against unregulated gambling. It’s against anyone profiting from gambling. Anyone, that is, except the state.

Personally, I think the state’s interest in the rule of law is far more important.

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.

Mr. Jenkins (and Friends) Go to Olympia — and Get a Hearing

Yesterday we finally got our chance to be heard. The House Commerce & Labor Committee gave us 15 minutes. I don’t think a few of them cared much for what we had to say but at least we had an opportunity to speak. There were roughly ten of us there, five of whom spoke. Our cameraman Erik Lawyer was on the camcorder. His excellent work is posted on YouTube: 1 — 2 — 3 — 4

Betcha.com: We Won!!

Nearly twenty months after the Washington State Gambling Commission ordered me to shut Betcha.com down or else, we finally received the word we’ve been waiting for. The Washington State Court of Appeals ruled that bettors on Betcha are not gambling:

The salient point here is that as a prerequisite to registration and use of Betcha.com’s website, users must acknowledge and agree that all bets made on the website are non-binding. Accordingly, bettors cannot have an understanding that they will receive something of value if they win.

Exactly what I’ve been saying for years.

We don't drink, but if we did we'd be breaking out the bubbly.

The court vindicated us, and while I wouldn’t say the judges were laudatory, they did throw in a few kind words. in particular, the court said we “forcefully argued” that the trial court erred in concluding the rule of lenity did not apply to this case because it was, for now, a civil matter. That wasn’t a difficult argument to make: there are no reported cases in any jurisdiction to support the trial court’s position. The trial court made that rule up without even the State’s suggestion. By contrast, the court was none too impressed with the state’s argument: it said there “is no logical basis for concluding” that bettors on Betcha are gambling under either state or common law.

Perhaps more importantly, the court rejected the State’s claim that the liberal construction provision the state Gambling Act applied here — emphatically so:

But that statute states in relevant part: “[a]ll factors incident to the activities authorized in this chapter shall be closely controlled, and the provisions of this chapter shall be liberally construed to achieve such end.” RCW 9.46.010. The plain language of this provision clearly provides that liberal construction is to be applied to chapter provisions regarding the regulation of enumerated “activities authorized.” To read the “liberally construed” language as broadly as the State advocates would require us to add language to the statute, which we cannot do. See Vita Food Prods., Inc. v. State, 91 Wn.2d 132, 134, 587 P.2d 535 (1978 ) (a court will not add words to a statute even if it believes the legislature intended something else but failed to express it adequately).

(Emphasis added.) Again, exactly as I’ve been saying for the last two years. In other words, Betcha has been out of business for almost two years based on a legal position that is rebutted by the plain language of the Revised Code of Washington. Incredible.

I might add: if the Gambling Act had actually read as the State needed it to, it would have been unconstitutional. In State v. Shipp, 93 Wn.2d 510 (1980), the Washington State Supreme Court held that the rule of strict construction of criminal statutes is a matter of procedural due process not subject to abrogation by statute. 93 Wn. 2d at __. That distinction is key: liberal construction is code for “the State always wins.” With strict construction, at least the individual has a chance.

News of the decision got out almost before I heard about it. Ian Ith of The Seattle Times called Betcha’s lawyer for comment literally before I’d read the opinion. (Mr. Ith’s report appeared on SeattleTimes.com late last night.) Venkat Balasubramani, a lawyer from West Seattle, reported on the decision on CircleID.com, albeit with a regrettable title. Randazza is the first blogger I’ve seen to pick it up: he covered it on his blog late this evening.

In the interest of full disclosure, one of the judges dissented. It was a three-paragraph job that made virtually no effort to tie fact to law. I’ll pick that one apart tomorrow for fun — there are literally no fewer than five errors therein. For now, it’s 2 am and I’m getting a bit tired.

It’s been a big day.

UPDATE: The case now has a cite: 201 P.3D 1045 (Wn. App. 2009).