WASHINGTON, DC--(Marketwired - Apr 2, 2014) - Lawmakers in Illinois, New York and Pennsylvania are talking about bills to legalize online gaming, following the examples of New Jersey, Delaware and Nevada that already passed laws to allow Internet gaming. This development is an indication that more states will follow suit, leading to a significant growth in the online gaming industry. While from a business perspective this is good news for operators, it bears potential risks such as fraud, issues with online payment processing and class action and similar lawsuits.
Jeff Ifrah, founder of Ifrah Law, a law firm based in Washington, DC that specializes in E-Commerce and iGaming, points out that one way for operators to prepare for such risks is by learning from the experience of traditional casinos. A casino in Las Vegas, for example, was recently sued by a gambler who lost half a million dollars in one night, claiming that he was too intoxicated and could not be held responsible for what he was doing, arguing the casino had enabled him and was thus liable. With the perceived lack of in-person supervision that comes with online gaming, similar claims against online operators are a real risk. When it comes to fraud or technical glitches that impact the online payment processing, thousands of players could be affected at the same time, which could easily result in class action lawsuits against the online casino.
Given the vast amount of players that can participate in online gambling at the same time, class action lawsuits will likely are a risk for operators. In class actions, common claims are brought together and are considered jointly. If the class wins a case, the defendant may be required to pay compensation to all plaintiffs that were affected. The class action plaintiffs on the other hand bear no risk of losing anything, because most class action lawyers work on contingency fees, which means they only get paid a percentage of the awarded compensation payment if the class wins a case. Jeff Ifrah explains that as a consequence many lawsuits that are based on weak claims might be brought up anyways in the hopes that the operator will agree to settle the case instead of risking costs and negative press through an ongoing lawsuit.
Jeff Ifrah and his team have extensive experience in defending online operators in class action lawsuits and represent numerous major iGaming companies from all over the world, amongst them the online poker sites PokerStars and Full Tilt Poker, as well as the Interactive Gaming Council, a non-profit organization that represents iGaming companies across countries all over the globe. Thanks to his extensive experience in civil litigation and in-depth understanding of criminal defense, Ifrah knows how to evaluate risks and what to do to avoid them. Regarding the current development in online gaming he advises operators to prepare for the eventuality of a class action lawsuit by taking preventative steps, for example posting warnings on their websites or implementing security measures.