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In December of 1999 I wrote the story below about Fred Marino suing Discover Card. In the wake of that lawsuit, last week Discover Card signed an agreement in California Superior court it will not operate merchant accounts with online casino companies that may do business with California residents. Since it is hard to tell if the customer is from California this may mean that players will not be able finance their online gambling with a Discover Card.

Original Story

Some of you may have heard about Cynthia Haines. Most of the online casinos know her name. Cynthia Haines is a woman from California who ran up $115,000 in credit card debts by gambling online. When it came time to pay up she refused.

She hired an attorney who claimed she was not responsible because of an old English common law doctrine dating back to Queen Ann. They also sought to bar credit card companies from collecting gambling debts from California residents because it is illegal in the United States. The suit was settled before actually going to court. In the settlement her creditors agreed to drop their claims and a gambling software company paid her $225,000 lawyers bill.

Following the settlement Providian National Bank announced that they would not let users of their Visa card gamble over the Internet. MasterCard will now require Internet casinos that use their cards to ask gamblers where they live and keep a record of the information. The company also requires the sites to post notices stating that Internet gambling is illegal in California and other States. Most of the publicity this case attracted had died down until Thursday December 7th when a new case was filed.

A California man named Fred Marino is suing American Express and Discover Card charging them with facilitating and profiting from illegal online gambling loans. The suit alleges that California has a long-standing public policy against enforcement of gambling debts. In 1998 Fred Marino lost over $25,000 while gambling online. When American Express threatened to sue him and ruin his credit report, Marino filed the suit. Ira Rothken who was the attorney for Cynthia Haines will represent him. Marino is seeking an injunction against American Express and Discover stopping them from extending credit for Internet gambling to California residents.

It will be interesting to see how the outcome of the pending suit will affect Internet Gambling.  Anthony Cabot, an Internet Gambling expert, believes the case will have little effect on online casinos.  Other analysts feel that if the credit card companies refuse to allow their cards to be used for online gambling it will decrease the use of online casinos.

Putting aside the legal issue of online gambling, I think we need to look at "Personal Responsibility." Anytime you use a credit card you are essentially entering in a contract with the credit card Company. They are loaning you the money. It is your money to spend any way you want but it is your responsibility to repay it.

I have written about the use of credit cards in the casino. I advise people to "Leave The Cards At Home". The cost of using a credit card to gamble with can be more than you think. It's too easy for some people to lose control when they start to gamble. When they are at the casino they have to physically walk to the cage and fill out the paper work to get the money. With online gambling they can enter in their card number and play away. I think this make it a little too easy for some people to lose control.

In March, 1400 Gambling Clubs in Australia removed ATM machines from the gaming area to help curb problem gambling. I think the U S casinos may have to someday address this issue as well. Maybe if it wasn't so easy to gamble with borrowed money we would be better off. Credit card companies could avoid lawsuits like Mr. Marino's by not allowing people to use their cards for online gambling.

Until next time, remember:
"Luck comes and goes...Knowledge stays forever."

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