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Last time I checked, and several times before that, internet casinos are illegal in the United States. Furthermore, the Department of Justice is supposed to go after and prosecute anyone who they know is an owner of an online casino. This is why internet casinos and poker rooms are located off-shore. Calvin Ayre lives in Costa Rica and supposedly can not come into the US because he owns bodog.com, a rather large online casino and sports book. Playing in an online casino is legal from the United States. The House of Representatives is trying to change that, but currently the right to actually gamble online is left up to individual states to decide. Imagine my confusion when I came across an article discussing a patent infringement suit involving the owners of two online casinos in Las Vegas, Nevada. The Las Vegas Business Press published an article last week regarding a lawsuit against DrHo888.com website. DrHo888.com is an online casino and the US Department of Justice has vowed to prosecute any internet casino owners who enter the United States. Angela Ho is the president of DrHo888.com and was in Las Vegas as a part of the U.S. District Court case against her company. The owner, Stanley Ho, is not part of this lawsuit. Even still, he's been the defendant of a lawsuit regarding internet gambling technology previously and nothing happened to him when he entered the US. Could it be the Department of Justice isn't so serious about their claim? How is it that the operator of an online casino is in a United States court of law anyhow? The answer is software infringement. DrHo888.com is a live internet casino. This means that players see the dealer on a camera and play with the dealer. The software which allows such a thing to take place has is under dispute of ownership. The "268 Patent" allows live casino gaming from remote locations via the internet. This patent was developed and licensed by Home Gambling Network (HGN) and its owner, Mel Molnick, of Henderson. Peter Kjaer, the husband of Angela Ho, asserts that Molnick assigned the rights to the 268 Patent for his companies Silver Arrow and Profit Networks. Molnick on the other hand disagrees and is countersuing, stating that Kjaer's Web sites have no such privilege. The whole thing is rather confusing. See how well you can sort out what the Business Press has to say about the whole thing: "What is not in dispute is that HGN licensed the patent to Kjaer's Antigua-based Caribbean Online in the course of settling a 2002 patent-infringement lawsuit. The accord states, in part, that Caribbean Online "shall have no right to sublicense the 268 Patent to any third-party manufacturer, casino or operator."" "Another clause in that agreement released Stanley Ho's Sociedade de Turismo e Diversoes de Macau from liability, as well as his Shun Tak Holdings, run by his daughter Pansy, who is the managing director of Shun Tak. Pansy is also MGM Mirage's joint-venture partner in MGM Grand Macau." "According to Kjaer's original complaint, Molnick's HGN and his own Profit Networks were to go 50-50 on a Costa Rica-based corporation, Home Gambling Network International, with Kjaer having veto power over any sublicensing of the 268 Patent. At this point, a disgruntled licensee -- CasinoWebCam (CWC) -- served papers on HGN, asserting that it still held the patent's rights. Kjaer claims that Molnick, to be rid of CWC, gave it a sublicense, thereby breaching Kjaer's exclusive control." "Another sore point between the two adversaries is a series of online wagers that Molnick placed from various Nevada computers, between March 21 and May 8, 2005, with DrHo888.com and affiliated Web sites, including NudeCasino.com and MonteCarloLive.com. On the basis of these bets, Molnick filed suit in Clark County, charging various Ho/Kjaer companies with sundry felony and misdemeanor violations of Nevada law."" Did you get all that? I'm not totally sure I did. I think they both agree that Kjaer doesn't have the right to sublicense the technology. Then Casino WebCam (which is a site I've won at) served papers to HGN as they are the owners of the patent. The problem is, it seems, that while Kjaer doesn't have the right to sublicense neither does Molnick, as Kjaer is suppose to have an exclusive contract according to Kjaer. Confused? It gets better as Molnick plays on Kjaer's websites and then sues them as internet casinos are illegal in the United States, but betting in them is not. I don't know anything about these two individuals. However, just from the facts stated, assuming I understood them correctly, Molnick seems like a putz. He gambles in an internet casino and then sues the casino? That's chutzpah. My guess is he lost. If he had won there would be nothing to sue about. Recently Craig Marquiz, Molnick's attorney, attempted to get a deposition from Kjaer in exchange for releasing him as a defendant. Kjaer's attorney, David Enzminger, found that entertaining. "Forgive me but Molnick took a lot of money from Kjaer's company for a patent license, and then turned around and claimed that the license is illegal and sued for infringement, I note that he hasn't returned the money he received as a royalty from this allegedly illegal conduct. We will not agree to any condition that depends on Mel Molnick keeping his word." The article went on and on about how these two are suing and countersuing with the he said he said going back and forth till you feel like you're at a tennis tournament. The article never mentioned the Department of Justice, nor did it mention the Department of Justice's desire to lock up the owners of each and every online casino there is. While I don't want the Department of Justice to go after any owners of internet casinos I would appreciate some consistency in their policies. Why would they prosecute one owner and not another, especially when they have the proof that the individual is an owner so clearly stated. This is a lawsuit about internet gambling for goodness sake! Related Links: Posted on: July 2, 2006
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