Appellate Court Holds That Web Site Not Gambling Where Bets Were Non-Binding

A state appellate court in Washington held that Betcha.com, an Internet betting exchange, was not in violation of the Washington State Gambling Act (“Act”) by providing a forum for person-to-person social wagering. The terms of service for Betcha clearly state that, “Bets made on Betcha are made on the honor system — that is, bettors are not obliged to pay when they lose…payments on wins are not guaranteed.” Additionally, the FAQ page included the question: “What if the person I’m betting against doesn’t pay?” The Web site answered: “You are basically out of luck…” The Act defines gambling, in part, as “an agreement or understanding that the person or someone else will receive something of value in the event of a certain outcome.” Betcha claimed that because the bets placed on the Web site were non-binding, the Web site is not engaging in gambling. The court agreed, holding that there was no basis for concluding that bettors had an understanding that winners wouldl be paid, so nothing was risked within the statutory definition of gambling.

TIP: This decision narrowly construed the Washington State gambling laws. Because gambling laws vary from state to state, and since penalties are severe for gambling violations, seek legal advice before starting a promotion or activity that could be construed as gambling or an illegal lottery.