The opening of the first regulated online gaming site in the United States has drawn a great deal of attention across the country. When Ultimate Poker let the virtual cards fly on Tuesday under the auspices of the Nevada Gaming Control Board and its intrastate regulations, it was seen as a landmark moment for online gaming and poker in the country. Although most are pleased with the rebirth of the online gaming and poker movement in the U. S., there are those who are also already preparing for an attack on the industry.
According to Reuters’ Sue Zeidler, a group of lawyers and academics met in Indianapolis, IN, last month to discuss litigation regarding online gaming. The discussion in particular was focused on whether a lawsuit “claiming online gaming further promotes gambling addiction (according to Zeidler)” has any chance at winning in a court of law. There were several prominent members of the legal community who were involved in the meeting or advising the group that should give a sense of foreboding to a regulated online gaming industry in the U. S. that is literally still in its infancy.
Zeidler was able to discuss the meeting with Boston attorney Scott Harshbarger, who wasn’t in attendance at the Indianapolis meeting but is said to be “working” with the group. Harshbarger informed Zeidler that more than 20 attorneys were invited to what was termed a “gambling litigation study group.” That group, Harshbarger indicated, have been in touch with each other discussing the similarities between gambling addictions and tobacco addiction and how the cases against the tobacco industry may be applicable to moving on the online gaming industry.
It is a subject that Harshbarger would know well. As a former Attorney General in the state of Massachusetts, Harshbarger was the lead attorney on the state’s litigation efforts against the tobacco industry in the 1990s. Another notable attorney, former Assistant U. S. Attorney Michael Fagan, helped to organize the Indianapolis meeting. Fagan was the prosecutor for 30 cases against offshore online gaming and sports betting sites from 1997 to 2008.
The potential litigation against online gaming companies would look much like what the tobacco industry faced in the 1990s. Class action lawsuits and action from the federal government eventually forced a settlement, with the tobacco industry paying $206 billion over 25 years to compensate persons and states for various illnesses (or their payments for tobacco related illnesses, in the states’ cases) and to start anti-smoking campaigns. Those that would like to see such style of litigation against online gaming companies say that they use “deceptive practices to lure customers, depend on addiction for profits and should be held liable for the costs to society,” according to Zeidler’s discussions with the National Council on Problem Gaming.
“Big product liability litigators are comparing Big Tobacco cases in depth with gambling cases involving casinos and addiction,” said University of Illinois professor and author John Kindt, who was one of the attorneys in attendance at the meeting in Indianapolis.
There is already some reaction from the online gaming industry on the subject. Zeidler talked with the general counsel to the American Gaming Association, David Stewart, who pointed out the errors in the approach by opposing attorneys. “The legal arguments are flawed,” Stewart stated to Zeidler. “It’s gambling and (sometimes) when you gamble, you lose. It is a government-approved, regulated product. Nobody’s made Nordstrom’s reimburse somebody who is a shopaholic.”
There is also another roadblock that the Indianapolis group will have to overcome. In 2004, a federal appellate court ruled that millions of gamblers could not file as a class action case (as was the tobacco cases of the 1990s) because each gambles for different reasons. That ruling struck down an effort to demonstrate that slot machines were “inherently deceptive devices.”
While there is reason for optimism in the poker industry with the return of regulated online poker and gaming in the United States, there is also the potential for further pitfalls from outside forces. With the individual states moving forward with offering online gaming to customers (and the potential for the federal regulation of the industry), it will no longer be the government against the game but lawyers.
