Antitrust Law Daily Wrap Up, RICO—Ariz. App.: Gambling losses not recognized as injury by Arizona RICO law, (Jun 5, 2014)
Organizations Mentioned:Jeffrey M. Proper, PLLC
By Linda O’Brien, J.D., LL.M.
An individual who incurred losses on Internet gambling websites could not bring a private right of action under the Arizona racketeering statute, since the losses did not constitute a cognizable injury, the Arizona appellate court has decided (Hannosh v. Segal, May 22, 2014, Portley, M.).
Jerry Hannosh bet on sporting events using Internet gambling websites and sustained losses of approximately $800,000. Hannosh filed suit against David Segal, Zalman Segal, and Joseph Segal, alleging that (1) their gambling websites constituted an enterprise engaged in a pattern of unlawful activity and (2) they were engaged in civil racketeering, in violation of Arizona’s Organized Crime, Fraud, and Terrorism Act. The Segals’ motion to dismiss for failure to state a claim was granted, and Hannosh appealed.
The trial court properly found that Hannosh could not bring a private right of action under the state RICO statute to recover his gambling losses. The state RICO statute allows a private cause of action for racketeering if a person sustains a reasonably foreseeable injury by a pattern of racketeering activity. In rejecting Hannosh’s argument that state law allowed a claim for an “injury to his person,” the phrase did not include monetary losses that were a result of voluntary gambling, according to the court.
Hannosh made no allegations that the wagering was rigged or the odds of winning were manipulated. Although he alleged that the Segals falsely stated that the gambling operation was legal because it was based in a foreign country, Hannosh received what he bargained for – an opportunity to win, the court noted. Hannosh did not allege that he was swindled, cheated, or deceived. Since he voluntarily undertook the risk that he could win or he could lose, his losses could not be considered an injury to his person that was recoverable under the state RICO statute, the court concluded.
The case is No. 1 CA-CV 12-0811.
Attorneys: Jeffrey M. Proper (Jeffrey M. Proper, PLLC) for Jerry Hannosh.
Cases: RICO ArizonaNews