Mixed Signals in Oregon

Anyone who tries to get a pulse on how the state of Oregon feels about online gaming will get mixed signals.

Take for example, events in just the last month out west.

Despite the fact that Oregon is considered an Internet gambling-friendly jurisdiction, the state Senate passed a bill that would prohibit online gambling. The bill, which has moved to the State House, has an exemption that enables racetracks to offer betting through closed-loop systems.

Days before the bill was passed out of the Senate, a class action lawsuit was filed in Oregon on behalf of "victims" of online gaming. The suit was filed by an attorney in the Salem, Ore. area after his wife racked up more than $350,000 of debt to online casinos.

The suit claims that not only can the operators and banks not collect the debt from her, but they owe her as much as three-times the amount of the debts. The suit names operators, banks, software companies and billing and processing companies as defendants.

So why isn't the suit and pending bill sending the industry scrambling in Oregon?

In fact they are doing just the opposite.

US Off-Track announced this week that it is expanding its account wagering services in Oregon. The company launched an Internet site last year which enabled punters to bet on horse, greyhound and harness races at tracks all over the U.S. and Australia. The company is now offering its services via a wireless application protocol (WAP) platform. The move makes the company the only provider in the U.S. offering bettors the chance to place bets via a PDA or WAP-enabled phone.

The WAP platform is wildly popular in Asia and is just starting to take off in Europe.

As Nevada and New Jersey continue a race to see which state will be the first to regulate and legalize Internet gaming in the United States, it's a bit ironic that an Oregon-based company has won the WAP race.

The credit card suit will be interesting to watch. The basis for the claim, and the reason for naming companies involved in nearly every facet of the gaming industry as defendants, is Oregon’s strict racketeering law. A similar case was thrown out of a federal court last month, but little can be drawn from that in regards to the Oregon case, which has been filed in a state court.

The Oregon suit attempts to paint a picture of the casino operators, software companies, billing processors and the banks themselves all acting as a group to extort money from Oregon residents. It alleges that since all the entities are carrying out an illegal activity they have no grounds for collecting any debt owed to them.

Online gaming law in Oregon may change. If the state’s legislature forces online operators to use a closed loop-system, rest assured operators will not miss a beat. The proper technology upgrades will enable them to continue to operate and see little difference for the user.

The proposed new law in Oregon may not change much about online gaming in the state, but the outcome of class action suit will have further reaching implications.

It will be interesting to see whether the case holds water or whether it's dismissed like the federal one.

The outcome could answer all questions regarding how friendly of a climate the state of Oregon is for the online gaming industry.