Another Sign Freedom’s on the March in the Emerald City — Not

A few months ago I blogged on my frustration about the wealth redistributors who get paid to call themselves traffic cops.

Add to it Seattle’s parking enforcers. Today’s Seattle Times‘ cover story — not good.

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).

Preventing Crime Isn’t the Only Thing on Their Minds

The biggest problem with living in Laurelhurst is that you can’t get here other than by going through one of those electronically-monitored intersections. Find yourself crossing the intersection line right when the light turns yellow and it’s a safe bet that you’ll be $200 poorer. Ronnie thinks she lightened the family wallet last night.

I don’t think it’s going to get any better.

There was a day when cops pointed REAL guns . . .

A recent study from researchers at the University of North Carolina suggests that a weak economy will mean more traffic tickets. The gist: every one percent (1%) loss of local government revenue leads to a .32 percent increase in the number of traffic tickets.

I’ve long suspected this was the case — frankly, I thought the numbers would be a lot worse. Kudos to the Tar Heel folks for putting the academics into my gut.

More From Seattle’s Garbage Nazis

It was bad enough when Seattle announced that garbage men have the right to go through your garbage to determine if you are improperly disposing recyclables. On Friday, our garbage man told Rhonda that it’s actually much worse than that.

Seems that every night, a small legion (nay, army?) of garbage police patrol Seattle’s streets in white minivans looking for residences that have extra garbage ready for pickup the following day. Apparently they take notes, filming it in many cases. They use that information as “evidence” of extra garbage, which gets billed out at $6/can. If the driver does not mark the resident for extra garbage pickup the following day, he gets written up. If the resident calls to complain about a false extra garbage charge, as I do often, the City uses the video evidence as proof of extra garbage. All to make $6.

Seinfeld's soup nazi has nothing on Seattle's garbage collectors.

To review: the Earth, we are told, is all but melting due to global warming. Times are so tight these days that the City can’t spare two nickels. But it can afford to pay garbage police to roam the city in polluting vehicles filming garbage cans. And all to make an occasional $6.

If anyone knows who comes up with these ideas, or if anyone knows of another so-called free country where taxpayer dollars are used to monitor the garbage, please let me know.

The War on Online Gambling: In Kentucky, It’s Getting Ridiculous

In case you don’t keep up on the developments of online gambling law, last week Kentucky Governor Steve Beshear ordered Kentucky authorities to seize 140+ domain names currently owned by Internet companies around the world. (The story.) All of these companies are operating legally in their respective domains, but the governor wants Kentuckians in Kentucky casinos, so he’s decided the domains should belong to the Derby’s home state. (I believe BoDog.com is one of the domains at issue. KentuckyDerby.com — not so much.)

Reason I’m writing about this here is that I’ve exchanged e-mails with Ed Leyden of iMega, a DC-based trade group that defends the online industry in matters such as these. iMega’s involved in this one, too. Anyway, turns out that Kentucky wants to seize these domain names on the theory that they constitute “gambling devices.” Kentucky law defines “gambling device” as follows:

(a) Any so-called slot machine or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and which when operated may deliver, as a result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or

(b) Any other machine or any mechanical or other device, including but not limited to roulette wheels, gambling tables and similar devices, designed and manufactured primarily for use in connection with gambling and which when operated may deliver, as the result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property;

If anyone can come up with an argument that a domain name constitutes a “gambling device” within this definition, please leave a post.

FullTiltPoker.com is reportedly one of the sites Kentucky has its designs on.

One more thing: Governor Beshear makes no bones about it that this action is all about protecting Kentucky casinos (from which Kentucky makes a bundle) from out-of-state competition — in effect, he wants to prohibit the importation of gambling services to Kentucky to protect Kentucky industry. According to an article in a Huntington, West Virginia paper:

Beshear believes Kentucky is the first in the country to attempt to block online gambling by taking over Web domain names of gambling sites.

“Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs and yield no tourism benefits,” Beshear said at a Monday afternoon Capitol press conference. “They are leeches on our communities.”

Kentucky, home to the Kentucky Derby, already has a state lottery and allows gambling at horse tracks and bingo halls. Blocking internet gambling sites in Kentucky would “protect the signature industry,” Beshear said.

Such sites “siphon off money from regulated and legal games such as Kentucky’s thoroughbred racing industry, our lottery and charitable gaming activities,” Beshear said.

Although Kentucky officials did not have a definite estimate of how much money is being lost to online gambling in Kentucky, Beshear claimed residents were wagering millions online.

Governor Beshear’s plan is about as per se a violation of the dormant Commerce Clause as one could imagine. But what the heck; when it comes to going after online gambling, who cares about the Constitution.

New Poll Shows 97% of Americans Favor Legalization of Online Gambling

Found this interesting tidbit on a Google search. According to a report on iGaming.com, a recent USA Today poll found that 97% of Americans favor legalizing online gambling.

Ninety-seven percent.

Meanwhile, online gambling in Washington is a felony punishable by up to five years in prison, about what the average child molester receives.

As we wait for a Washington appellate court to decide the fate of Betcha.com, we can only hope that the judges will give popular opinion at least some consideration.