State resident sued offshore operation for $800,000
If you live in Arizona and gamble online with offshore websites, don't expect legal relief in the event of a dispute… the Arizona Court of Appeals has just thrown out an $800,000 case against a sports betting operator in Costa Rica.
On Thursday the court ruled unanimously that the state racketeering laws that plaintiff Jerry Hannosh claimed should protect him from illegal activity do not apply.
A report from Capitol Media Services outlines the Hannosh case, revealing that the online punter based his claim on Arizona's version of the Organized Crime, Fraud and Terrorism Act, also known as the RICO statute, which specifically includes the operation of an illegal gambling enterprise.
The Act also makes provision for anyone who sustains "reasonably foreseeable injury to his person, business or property" due to illegal racketeering, and allows for the recovery of damages in superior court.
The case dates back to 2012 when Hannosh sued David, Zalman and Joseph Segal – the operators of the Costa Rica online sports betting sites, alleging their gambling websites constituted an enterprise engaged in a pattern of unlawful activity and that they were engaged in civil racketeering.
The Segals filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted, arguing that Hannosh had no cognizable injury, could not show proximate cause, and that his allegations inadequately supported liability.
The superior court granted the motion and awarded the Segals their attorneys' fees and costs.
The court, however, reconsidered the award of attorneys' fees, and ultimately found that it would be unjust to award fees to the Segals. The Segals filed an unsuccessful motion asking the court to reconsider its denial of attorneys' fees, and the two sides then went to the appeal court.
Judge Maurice Portley, writing the unanimous court decision, said the state racketeering laws do not apply in the Hannosh case.
At the very least, Portley said gambling losses do not constitute the kind of "injury" covered by state racketeering laws, which allow those who have been harmed to recover.
"Hannosh got what he bargained for: an opportunity to win," Judge Portley wrote, noting that Hannosh was aware of the terms, including the fact that the web site would keep 10 percent of any winnings, and that Hannosh did not allege that the odds were manipulated or the gaming was rigged.
"Voluntary Internet gambling is a gamble – pick the right team or the spread on the game, you win and make money; pick the wrong team or the spread on the game, you lose and owe money," the judge wrote.
The court found unanimously that Hannosh's argument that "injury" includes losses from an alleged illegal gambling operation was unacceptable.
"Gambling losses would not qualify as an injury to a person because gambling without a chance to lose is not a legally protected interest," the judge wrote. "Because Hannosh voluntarily took the understood risk that he could win and that he could lose, his losses cannot be considered an 'injury to person' recoverable through an Arizona RICO lawsuit."
Online Casino News Courtesy of Infopowa