Appeals-court ruling on betting site favors entrepreneur

If you can renege on a bet, is it actually gambling?

A state appeals court ruled Tuesday that the answer is clearly no. And that's a huge vindication for Nick Jenkins, a would-be online entrepreneur whose Web site, Betcha.com, was shut down by the state Gambling Commission nearly two years ago.

The court ruled that the state needlessly raided Jenkins' North Seattle offices to pull the plug on his patent-pending site, which paired bettors to wager on anything from ballgames to the weather and anything in between.

Because losers always had the right to click a button marked "I refuse to pay," there was no guarantee that any money would actually change hands, the court said.

"Accordingly, there is nothing risked, which is the essence of both the common law and statutory definition of 'gambling,' " wrote Judge C.C. Bridgewater for the Court of Appeals Division II.

But don't expect to log on to Betcha.com any time soon. Jenkins said that after the whole experience, which included being jailed and extradited to Louisiana, he's not sure he's yet ready to roll the dice again on his venture.

"This could really be a big business; it could be a really big deal," he said. "But it makes it tough when the government is standing on your neck."

The state Attorney General's office has maintained that the Web site was still illegal regardless of the ability to renege on bets, because players participate based on an expectation that they might win money. And they point out that Jenkins still would keep the fees from the betting even if losers renege.

The office said Tuesday that it was too early to say whether it would appeal to the state Supreme Court.

Betcha.com went online in June 2007, after Jenkins, who has a law degree, aggressively researched gambling statutes to make sure his idea was legal.

Modeled on eBay, the site itself didn't actually hold games or lotteries. Instead, it facilitated wagerers to propose bets. One person could post a bet on, say, how many people might be laid off from a particular company. If someone took the bet, the game was on.

"It's an unlimited universe," Jenkins said.

Participants provided their credit-card numbers, and Betcha.com held the purse for the wagers and collected a small fee from each player.

But it was all on the honor system. And it said so right in the terms of service agreement: "Bettors are not obliged to pay when they lose," it said. "We hope they will, of course, not because they have to, but because they should."

Still, within two weeks state Gambling-Commission agents warned Jenkins to shut down the site. The next month, they seized his computers and business records.

He could have faced felony charges that might have added up to years behind bars, said Jenkins' lawyer, Lee Rousso, of Renton.

"This is the definition of overzealous," Rousso said.

Jenkins sued the commission, hoping for an order that his site was legal. Instead, a Thurston County Superior Court judge agreed with the state. So Jenkins appealed.

In the meantime, though, prosecutors in Louisiana charged Jenkins with several computer-gambling felonies. After spending about four days in jail, Jenkins negotiated a deal with prosecutors there in which the case will be dropped if he complies with certain conditions.

So now Jenkins said he he remains wary that the state will come after him again if he restarts his site, even with the ruling on his side.

"I've learned my lesson the hard way," he said.

Ian Ith: 206-464-2109 or iith@seattletimes.com