Woman sues credit card company for funding her online gambling losses

Some experts say the case could be the beginning of the end for Internet casinos.

Cynthia Haines had herself been sued by San Francisco-based Providian National bank after she allegedly failed to make payments on a Visa credit card account.

She used a dozen different credit cards to cover her online gambling losses she incurred from playing craps, blackjack and other games of chance since 1997.

Ira Rothken, Haines' lawyer, filed a counter-suit on July 23 against Providian National Bank, Visa International, MasterCard International and 50 on-line gambling operators alleging unfair business practices.

The suit also seeks to bar the credit card companies and their issuing banks from collecting the gambling debts owed by California consumers, since gambling is illegal in this state.

"The credit card companies knew or could very easily ascertain that their merchant accounts were being used to mislead consumers to partake in illegal wagering," said Rothken.

Rothken alleges that Providian Bank failed to send Haines documentation of her debts. The suit also argues that on-line gambling wagers are illegal transactions and therefore unenforceable in the California courts.

Online gambling is illegal in the United States.

Visa International spokeswoman Carolyn Brestchneider said "a consumer's financial responsibility in the real world is the same as in the virtual world."

Providian spokeswoman Laurie Cole also said the bank was still reviewing the matter. "Providian firmly believes that to the extent that the consumer incurs a debt, they should bear the responsibility of paying it back," said Providian spokeswoman Laurie Cole.

According to Whittier College law professor and American Bar Association gambling law expert I. Nelson Rose said Haines' lawsuit- if successful - could collapse the Internet gambling industry that brings in $600 million annually in wagers.

"It could be the start of the end," Rose said. Credit card transactions are the quickest and easiest way to set up digital betting accounts.

Rose complains that the sites are unregulated and the software that runs the games goes unchecked.

The unwieldy nature of online gambling has fueled state and federal government initiatives to suggest banning the sites, including a bill backed by Sen. Dianne Feinstein, D-Calif., which seeks to prohibit Internet betting altogether.

Credit card accounts are the key to Internet casino betting, according to Rose.

"Anything else is too slow," Rose said. "Without credit cards, on-line gambling is doomed."

archive