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NEW AMERICA REVISITED State Sues Company Over Gaming Laws.(THE NEW AMERICA)(NEW AMERICA REVISITED)
Byline: Robin M. Grugal and Adelia Cellini Linecker
New Jersey filed suit last month against online gaming software developer CryptoLogic Inc. (New America, Aug. 15) and its largest licensee, InterCasino, claiming fraud and violation of state gambling laws.
The state accuses eight Internet gambling sites of breaking state law by providing illegal betting access to New Jersey residents. These gambling sites sidestep domestic gaming laws by setting up shop in markets that permit online gaming, such as Antigua, Curacao and the Isle of Man.
The state's attorney general says CryptoLogic should be held liable if it knew its services were being used to violate New Jersey law, as the state believes was the case.
But as laws in the U.S. and Canada are now interpreted, online gaming companies have the right to develop software and carry out Web hosting duties for customers, so long as the actual gaming operations are not operated domestically.
InterCasino, which accounts for three-fourths of CryptoLogic's revenue, is based out of the Caribbean nation of Dominica.
The civil action asks that defendants be made to pay back all of the money won from New Jersey users in the past six months, and requests the maximum statutory civil penalty of $7,500 for each violation of the state's Consumer Fraud Act.
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