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Gambling Litigation Study Group Considers Suing Online Casinos

Published on November 1, 2014, 4:21 pm

by Jeff Grant Twitter account Jeff Grant LinkedIn account

The judicial system in AmericaLegalized online gambling, once just a pipe dream, is now a reality in the United States. Just this month, the state of Nevada gave the go-ahead to the country's first legal online gambling website, Ultimate Poker. Other states are expected to follow suit by approving the operation of online casinos that are affiliated with land-based casinos.

While some Americans are thrilled by the prospect of legal online gambling in their own backyard, others disapprove of the new policy. A group of lawyers calling themselves a “gambling litigation study group” put their heads together in April 2013 to determine whether a lawsuit against online gambling sites would be a viable option for recouping some of the money they believe online casinos will cause Americans to lose.

Litigation Study Group Considers Strategy Similar to Tobacco Class Action Suit

The scenario in which lawyers sue online casinos would be similar to that of the Tobacco Master Settlement Agreement of 1998, in which cigarette company giants were sued by 46 attorneys general for putting public health at risk via their product.

Four large tobacco companies agreed to pay $206 billion in damages over the course of 25 years to compensate for damages caused by their unhealthy and addictive tobacco products. Some of that money goes toward medical expenses for those with cancer and other smoking-related illnesses, while other funds enhance the American Legacy Foundation, an anti-smoking group which attempts to prevent teen smoking and encourages addicts to quit.

Ten Out of Twenty Invited Experts Attend Indianapolis Meeting

Scott Harshbarger (Massachusetts attorney)
Scott Harshbarger (Massachusetts attorney)

Twenty high-profile lawyers were invited to attend the gambling litigation study group meeting in Indianapolis; only ten actually attended. Anti-gambling attorney Michael Fagan helped coordinate the meeting. Fagan is no stranger to this type of prosecution; he has a history of going after over 25 offshore sports betting operations. The litigation group is also under the guidance of Scott Harshbarger, a Massachusetts attorney with experience fighting against the tobacco industry. Together, these two leaders hope to find a way to prosecute U.S.-based cyber casinos for the bad influence they have on Americans.

The Case Against Online Gambling

Critics of online gambling say the pastime is deceptively glamorous, luring young people and other weak-minded souls who are easily swayed by peer pressure and temptation. They liken addictive gambling to addictive smoking, in which a heartless corporation preys upon victims who are defenseless and vulnerable.

Although they recognize that individuals do have a choice in whether they gamble or not, they believe the institution of gambling is more powerful than the individual, that it unfairly cons people into spending money on things that just aren't good for them. These critics cite a $7 billion dollar yearly cost to the United States' health and criminal justice systems due to the existence of gambling in America.

Stoltz vs. OLG: A Similar Lawsuit in Canada

A lawsuit similar to the one proposed by the litigation study group is currently underway in Canada. Attorney Lori Stoltz, a Toronto health care lawyer, is leading a 10,000-gambler fight against OLG,Ontario Lottery and Gaming, claiming that the organization took unfair advantage of the individuals' weaknesses by allowing them to gamble. Stoltz predicts that similar suits will pop up in other areas of North America as legalized online gambling becomes more common.

The Critics Don't Have a Case, According to Washington Lawyer

David Stewart, a Washington lawyer and American Gaming Association supporter, argues that the lawyers comprising the gambling litigation study group do not have a viable case. He refers to gambling as a “product,” indicating that American citizens have the right to partake of that product as much or as little as they please. The social and financial costs of addictive betting cannot be determined, according to gaming supporters, because this is an addiction that often concurs with other addictions and personality disorders.

Ultimate Poker administrator Tobin Prior defends his business, saying the locus of control rests with the gambler, not the government. Furthermore, he says his company does employ certain “safeguards” that enable customers to limit themselves if they wish. He is also quick to point out that people don't have to gamble if they don't want to.

More Online Gambling Opportunities in America

Tobin Prior (administrator of Ulimate Poker)
Tobin Prior (administrator of Ulimate Poker)

Americans have been gambling online for a years through offshore venues, but only recently did it become legal for gambling websites to operate in the United States. Nevada's Ultimate Poker is the first, but certainly not the last, online gaming site in the country. Delaware and New Jersey have also legalized online gambling; it is only a matter of time before these states establish cyber casinos to accompany their brick-and-mortar casinos. Massachusetts, California, Illinois, and Mississippi are reported to be well on their way to passing laws allowing them to acquire gambling websites as well.

Stumbling Block: Gamblers Are Not a Part of One "Class"

Although it may seem like the critics have a leg to stand on in their prosecution, previous legislation could make it hard for them to establish a class action suit. In 2004, federal legislation ruled that gamblers cannot be lumped together as one "class" of people, as everybody gambles for their own unique personal reasons. If prosecutors decide to attack online casino sites, they will have a long road ahead of them. Before filing a class action suit, they must have a legitimate class to work with. The 2004 ruling could make this difficult.

A Question of Control

The underlying question behind this issue is one of control. Anti-gaming lawyers believe the government has a responsibility protect online gamblers from harming themselves. They cite problem gambling statistics, viewing the addiction as a disease that is out of peoples' control. Pro-gambling lawyers believe the government should keep their noses out of the issue, allowing citizens to gamble online as they please. They cite personal freedom and the belief that American citizens can make these types of decisions for themselves.


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