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State of Missouri v. Interactive Gaming & Communications Corp.

Defendant Interactive Gaming & Communications Corp. ("IGC") was a Delaware Corporation with a place of business in Pennsylvania. It did not appear in this action. Defendant's wholly-owned subsidiary, Global Casino Ltd. ("GCL") was a Grenada Corporation engaged in Internet gaming. IGC operated a web site which advertised the gaming services offered by its subsidiary GCL. This advertisement invited those interested in participating in gaming activities (including users residing in Missouri) to submit account applications and appropriate payment to GCL care of IGC. Once received, the user would be permitted to engage in gaming activities run by GCL. IGC's site also featured a toll free number the user could call for more information about the offering. This phone number was answered by GCL. Callers were advised that the gaming activities conducted by GCL were legal in the State of Missouri.

The Missouri Attorney General charged that defendant IGC's conduct violated Missouri statutes which prohibited both illegal gambling as well as using fraudulent means to sell goods and services. The Court agreed, and enjoined defendant, inter alia, from:

(1)advertising its gaming services in Missouri;

(2) advising users that gaming services were legal in Missouri; and

(3) accepting "account applications" or money from Missouri residents.

Finding that GCL was the alter ego of IGC, the Court held that defendant had entered into illegal contracts in Missouri with those Missouri residents who had accepted defendant's offer to provide gaming service by returning an "account application" and payment to defendant. This constituted the transaction of business in Missouri under that State's jurisdictional statutes.

The Court also found that defendant, both by affirmatively informing users that its gaming activities were legal in Missouri, and by failing to inform them of the converse, were using false and deceptive means to promote the sale or advertisement of merchandise in violation of Missouri statutes.

The Internet gaming community will find the extent of the sanctions imposed on defendant IGC of interest, particularly with respect to the keeping of records as to the users of its services.