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Kevin Smith

Net Bettor in Oregon Vies to Take down 'Racketeering Enterprise'

10 April 2001

Defendants Named in ORS 30.750 and 166.725

Astra Casino
King Neptune's Casino
Liberty Casino
Boss Casinos Ltd.
Sunset Technology Inc.
Intertainet Overseas Licensing Ltd.
Lasseters Hotel Casino
English Harbour Entertainment Ltd.
Forward Slash Internet, Ind., IBC SA Netainment N.V. Aqua Online (Int.) Ltd. VR Services (Pty) Ltd. Universal Spheres Inc.

Billing Companies:
Cyber Café Inc.
IK2, Inc.
Surefire Commerce Inc.
Cyber Finance Investments
Mercantrade (Pty) Ltd
WebDollar Inc.
Sullivan Brownstone Ltd.
Cryptologic Inc.
EC Exchange Inc.
Cyber Finance Investments

Software Suppliers:
Microgaming Systems (UK) Ltd.
CryptoLogic Inc.

Credit Card Companies:
Advanta Bank Corporation
Capital One Financial Coporation
Chase Manhattan Bank USA, N.A.
First USA Bank, N.A.
Fleet Bank
Greenwood Trust Company
Oregon Telco Credit Union
Providian National Bank
Wells Fargo

Despite a precedent set last month against the trend at the federal level, a lawsuit claiming that credit card companies cannot collect on gambling debts because they were incurred by means of an illegal activity has been filed in Oregon.

Further, the suit contends that the numerous online casino operators, software providers and financial institutions named as defendants should compensate for more than just the money lost.

The class action suit, filed in a Clackamas County circuit court on behalf of Cathy Buchal, comes just a month after a bill making it illegal for companies to collect gambling debt incurred at online casinos was introduced in the Oregon state Senate.

Buchal is seeking double the damages she lost while gambling at various online casinos. According to the complaint, Buchal had four separate sums that she lost at a number of sites; her losses totaled $151,200; $120,470; $71,475; and $12,699--a total of $355,844. In each case she's seeking double the amount of her losses.

In addition to suing the casino operators, Buchal has named credit card companies and their issuing banks as defendants, along with the companies that designed the software for the sites and the billing and processing companies that were used at each casino.

According to the complaint, a racketeering empire was set up between the casino operators, billing companies and software companies. The complaint also claims that all three groups of defendants (the operators, billing companies and the software manufactures) committed a Class C Felony of "unlawful gambling in the first degree," that the defendants should be subject to the Oregon Racketeer Influence and Corrupt Organization Act (ORICO) and that the groups created a racketeering "enterprise that preys upon Oregon citizens."

While the complaint doesn’t include the actual credit card companies in the racketeering empire, it doesn’t let them off the hook easy.

"But for their participation, the Racketeering Enterprise could not succeed," it reads. "And the credit card defendants knew or had reason to know of the unlawful nature of the Racketeering Enterprise."

In addition to seeking double the amount of money lost while gambling, the plaintiff is seeking $1,084,663 in damages from the billing companies used by the various online casinos.

She also claims that the $110,564 she owes to nine different credit card issuing banks is void and not collectable since they are gambling debts.

The class action portion of the complaint seeks a declaratory judgement claiming that credit card companies cannot collect debts occurred while gambling. It also seeks an injunction to keep all defendants from operating in the state of Oregon.

The defendants have 30 days to respond to the complaint before a court date can be set.

The case was filed just weeks after a similar case on the federal level in New Orleans was dismissed. In the federal lawsuit, 21 cases were combined into a class action suit claiming that MasterCard International and Visa International couldn’t collect gambling debts. The plaintiffs used the national Racketeering Influenced Corrupt Organizations Act (RICO) to make similar claims to those made in the Oregon case. A U.S. District Court Judge dismissed the federal case before it was to go to trial.

Click here to view ORS 30.750/166.725.

Net Bettor in Oregon Vies to Take down 'Racketeering Enterprise' is republished from
Kevin Smith
Kevin Smith