Arizona courts rule that the recovery of money lost in illegal gambling is not covered under the state's RICO act.
On Thursday, May 22, the state Court of Appeals of Arizona rejected Jerry Hannosh's attempt to sue the operators of an illegal offshore online gambling site for $800,000 that he lost. The Judge, Hon. Maurice Portley, stated that Arizona's racketeering laws do not apply to Hannosh's case.
He explained that gambling losses do not constitute the kind of "injury" that Arizona's racketeering laws are meant to protect. Hannosh knew what he was getting into, including the fact that the gambling website would keep 10% of anything he won.
"Voluntary Internet gambling is a gamble - pick the right team or the spread on the game, you win and make money; pick the wrong team or the spread on the game, you lose and owe money," wrote the judge. "Hannosh got what he bargained for: an opportunity to win."
Hannosh's Claim
Hannosh based his claim on Arizona's Organized Crime, Fraud and Terrorism Act, also known as the state's RICO statute. This statute covers any act in which the punishment is one year or more in prison, and it specifically includes illegal gambling.
The statute also states that anyone who sustains "reasonably foreseeable injury to his person, business or property" due to illegal racketeering can seek to recover damages.
Judge Portley maintains that "injury" does not include losses from an illegal gambling site. "Gambling losses would not qualify as an injury to person because gambling without a chance to lose is not a legally protected interest," he wrote. "Because Hannosh voluntarily took the understood risk that he could win and that he could lose, his losses cannot be considered an 'injury to person' recoverable through an Arizona RICO lawsuit."
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