"[A]ll gambling involves betting, but not all betting involves gambling," argued Nick Jenkins. He said that since his Seattle-based website, Betcha.com, matched people who wanted to make bets but didn't participate in those wagers or even enforce payment, it did not violate the state's prohibition on online gambling. He appealed the issue all the way to the state Supreme Court.
Today he lost that bet.
Jenkins started Betcha.com in 2007 with the state's anti-gambling laws very much in mind. For a fee, someone could post a bet on anything from sporting events to astronomical occurrences to Jenkins' site. If someone accepted it, Betcha held the money for both parties. For 72 hours after the winner was decided, the loser had the option of hitting a button saying "I Wanna Welch." Hit that button and the bet was off.
People who welched ended up with poor "honor ratings" on the site to discourage others from making bets with them in the first place. But since the winner could only assume she might get paid, Jenkins contended, his site was perfectly legal.
Nick Jenkins says he's just the middle man.
But the state Gambling Commission didn't agree. According to Jenkins, the agency ordered him to shut the site down shortly after he launched it. In July 2007 he sued in Thurston County Superior Court to keep Betcha open for business. Jenkins lost in Superior Court, but the state Court of Appeals reversed the outcome in 2009 citing Betcha.com's payment model. "The unique aspect of Betcha.com's business model was that users conducted their activities with the understanding that bettors were not required to pay if they lost a wager. Notably, users had to first agree that bets were 'non-binding' in order to use the website."
But the state high court took a much harder line. Under state law, facilitating bets makes you a bookie, even if you don't participate in the bets themselves, the court ruled. "We hold that Betcha was engaged in bookmaking and therefore professional gambling," Justice Tom Chambers wrote in the unanimous opinion.
Chambers added that the question of whether or not the bets themselves fell within the scope of the law was irrelevant.
Unfortunately for Jenkins, a bill sponsored by Seattle-area U.S. Representative Jim McDermott to legalize and tax online gambling won't help him, says attorney Marc Randazza.
The San Diego-based Randazza handles online gambling cases throughout the country and has been closely following Jenkins' fight with the state Gambling Commission. According to Randazza, McDermott's bill would end a federal law prohibiting people from making money from online gambling, but would not overturn state laws that ban the practice outright.
"The federal government isn't going to tell the states whether they can have gambling or not," Randazza says.
So to bring back Betcha.com Jenkins would have to convince the state legislature to overturn this state's rules banning online gaming.
Here's hoping he didn't have any money on the outcome of his own case.