Nevadan’s Internet freedom at issue in Minnesota court

John Wilen

Wednesday, May 6, 1998 | 9:07 a.m.

The Minnesota Supreme Court hears oral arguments today in a civil case brought against Las Vegas Internet gambling pioneer Kerry Rogers by Minnesota Attorney General Hubert Humphrey III.

But though the case ostensibly involves the legality of gambling online, the arguments are expected to have very little to do with gambling, and very much to do with the nature of the Internet itself.

"It's going to be the landmark case as to whether or not a state has jurisdiction over a party on the Internet," said Oscar Goodman, an attorney representing Rogers in the case.

At issue is whether the State of Minnesota has the right to prosecute Rogers in Minnesota for Web sites he maintains in Las Vegas.

Humphrey first sued Rogers in July, 1995, alleging false advertising and deceptive trade practices. Through his company Granite Gate Resorts Inc., Rogers operates several web sites that claim Internet gambling is legal, and that say they will soon take bets. Rogers says he has yet to take a single bet over the Internet.

Under Rogers' plan, any bets placed via the sites will be routed through a Belizean company, Global Gaming Services Ltd., which is also owned by Rogers. Internet gambling is legal in Belize, thanks to Rogers' help in drafting that country's Computer Wagering Licensing Act.

"I know where the line is and I don't believe I've crossed it," Rogers said in a recent interview.

Rogers filed a motion to dismiss the complaint, claiming that because his business operations are located in Nevada, he is outside the jurisdiction of Minnesota prosecutors.

The motion has been denied by both a Minnesota trial court and an appeals court. Wednesday, Rogers' attorneys will argue that these lower courts erred in not dismissing the case.

The crux of Rogers' argument is that because Minnesotans must take action themselves to access his Web sites, they are "getting" the information. It is not being unwillingly transmitted to them.

"Granite Gate never made any contact with a Minnesota resident," states a brief filed by Rogers' attorneys. "This case only deals with the issue of whether a Minnesota state court has jurisdiction over a Nevada resident who maintains a Web site which has been accessed by Minnesota residents."

But Humphrey claims that not only are Rogers' Web sites accessible in Minnesota, they are regularly accessed by Minnesotans. Because Rogers is trying to build an online business that can be accessed globally, goes the attorney general's argument, by default Rogers is trying to drum up business in Minnesota.

"Appellants cannot seek to profit from the Minnesota market, yet claim they are beyond the jurisdiction of the Minnesota courts," states Humphrey's brief. "Appellants have advertised in a national market, and it is not unreasonable to ask that they bear the responsibilities that come with that advertising."

Though the Minnesota Supreme Court will hear arguments today, it is unclear how long a decision will take, Goodman said. Rogers is also facing a federal criminal prosecution in New York for violating provisions of the Federal Wire Act. Rogers also intends to defend himself vigorously in that case.