Judge bans Internet gambling company from operating in Missouri

[Bill Stewart <stewarts@ix.netcom.com>]

>Judge bans Internet gambling company from operating in Missouri
>
> http://www.nando.net/newsroom/ntn/info/052597/info14_11497.html
>
>Copyright � 1997 Nando.net
>Copyright � 1997 Kansas City Star
>
>KANSAS CITY, Mo. (May 25, 1997 00:31 a.m. EDT) -- A Missouri judge
>on Friday banned an Internet gambling company from operating in the
>state.
>
>The Jackson County ruling places Missouri in the forefront of an
>emerging national debate that will determine whether cyber gambling
>fades or evolves into a $10 billion-a-year business, as some
>industry analysts project.
>
>Visiting St. Francois County Circuit Judge Stan L. Murphy also
>ordered that Interactive Gaming & Communications Corp. pay more than
>$66,000 in fines and legal expenses. Interactive Gaming has refused
>and plans to take its fight to federal court.
>
>Among other terms Murphy imposed on Interactive Gaming, which
>operates out of Blue Bell, Pa.:
>
>- Interactive Gaming cannot market, offer or promote gambling in
>Missouri.
>
>- Interactive Gaming must post a notice on its home page that
>Missouri residents cannot register to gamble, and it must immediately
>reject any who try. It must also notify the state attorney general if
>anyone does try to register.
>
>- At its expense, the company must provide any of its computer
>records or office records for any audits requested by Missouri
>Attorney General Jay Nixon.
>
>The judge also found that Interactive Gaming's subsidiary, Global
>Casinos Ltd. in the Caribbean, is a mere "alter ego" of the
>Pennsylvania firm. Interactive Gaming uses offshore gambling
>accounts to try to circumvent Missouri law, he ruled. His ruling
>applies to only Interactive Gaming and Global.
>
>About 20 offshore companies offer gambling on the Internet and more
>are coming, said Sue Schneider, managing editor of Rolling Good
>Times OnLine, an Internet news service. Slot machines, card games,
>roulette and other casino-style games can be played after
>establishing a cash account that is drawn on during play.
>
>Nixon said he would watch for any other companies operating in
>Missouri and act on any complaints against them.
>
>He said this was the first time in the United States that an ongoing
>Internet gambling operation had been sued and stopped. He said the
>company violated state gambling laws. The gambling business never
>gained momentum in the state, because Nixon last month filed a
>restraining order against it.
>
>The issue of Internet gambling is getting attention elsewhere.
>
>In Wisconsin, a state case is pending in which the state sued a
>company that was about to start. A federal case also is pending in
>Wisconsin in which a gambling company has sued to get a judgment on
>whether Internet gambling is legal. A bill to make Internet gambling
>illegal failed in Congress last year; a similar measure is pending
>this year.
>
>As more Internet gambling companies open or announce plans to start,
>Nixon said, "they are watching our case and the one in Wisconsin."
>
>Philadelphia lawyer Lawrence Hirsch, who represents the company,
>said Friday that the fight between Nixon and Interactive Gaming just
>started.
>
>"We'll send them a lawsuit in federal court," Hirsch said. "They're
>trying to murder a legitimate business."
>
>The company will put the warning on its Internet site that Missouri
>residents are forbidden to play, he said, "and we'll tell them why."
>
>"Do the people of Missouri think they need to get Jay's permission
>to get on the Internet and spend $25?" he asked.
>
>Murphy signed the default order following unopposed testimony
>Thursday in Kansas City from assistant Missouri attorneys general.
>Hirsch said he chose not to appear.
>
>Assistant Attorney General J. Dale Youngs called witnesses,
>presented evidence and drove home his points for four hours.
>Highlights of the hearing included:
>
>- On Feb. 25 an investigator called the web site and a woman named
>Marjorie assured him gambling would be legal. On March 17 he got a
>user ID number and the password "Daisy." He mailed in $100 to play
>in a slots tournament. Nixon soon filed against Interactive Gaming.
>
>- On April 24, Interactive Gaming agreed not to accept business from
>Missouri residents and to put a warning to them on its home site.
>
>- From May 9 to 20 another undercover investigator registered to
>gamble, mailed in $200 to start an account and gambled. That was
>unintentional, Hirsch said Friday,"stupidity by employees."
>
>- Missouri strictly controls gambling and checks backgrounds of all
>companies that apply for licenses. The FBI had served a search
>warrant at Interactive Gaming headquarters in February. The company
>does not know the reason for the search and no charges have been
>filed, Hirsch said Friday.
>
>- All the income from Interactive Gaming comes from gambling
>accounts that clients deposit in Grenada. If customers decided to
>suddenly withdraw all that money, the company would be more than $1
>million short.
>
>Hirsch said Friday that Interactive Gaming's only gambling accounts
>in Missouri came from the two investigators. He hopes for more later,
>he said, when courts establish that citizens or federal laws control
>Internet gambling.
>
>"They say they're not under Missouri law," Nixon said, "but that
>hasn't prevented them from taking Missourians' money."
>
>By JOE LAMBE, Kansas City Star
>
>************************************************************************
>Michael A. Geist
>Associate in Law, Columbia University, School of Law
>435 West 116th Street
>New York, NY, 10027, U.S.A.
>e-mail: mag76@columbia.edu
>url:    http://www.columbia.edu/~mag76
>
>

#			Thanks;  Bill
# Bill Stewart, +1-415-442-2215 stewarts@ix.netcom.com
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