Editor's Note: This story was originally published on December 14, 1998.


Chutzpah!

That's the word a dozen attorneys from Visa, Mastercard, and other card-issuing banks seemed to be searching for at a hearing in Marin County, California on December 10, 1998.

They say it's outrageous that their clients are being sued by a woman who, by her own admission, gambled and lost more than $70,000 to online casinos.

Cynthia Haines put her losses on her credit cards -- then she sued her creditors on behalf of the People of California for unfair business practices.

Visa and Mastercard have moved to dismiss Haine's case, or at least delay matters until the specific casinos involved are named in the suit.

"We're really ready to proceed now," says Jim McCabe, an attorney representing five of the card-issuing banks, including Capitol One, Chase Manhattan, First Card, First USA, and MBNA. "We just think it is procedurally improper to try to shut down someone's business without having their presence in the courtroom at the time you're shutting them down. [It] seems unfair."

But the small case before Judge William McGivern raises larger online issues. Is online gambling legal at all? And where is the online gambling actually taking place? Visa, however, doesn't think this case will bring answers to these questions.

"This is a woman who used her credit cards to gamble online and when she lost, she decided that she would try to avoid paying those debts by claiming that the credit card associations and banks were somehow responsible for her gambling," says Joshua Floum, an attorney representing Visa International and Visa USA in the suit.

"I don't think that a judge will accept that. It's not logical. It's scapegoatism, so I expect this case will be dismissed."

"As much as my client has made mistakes and acknowledged them, the much greater evil lies with these financial institutions who are preying on people in California," replies Ira Rothken, attorney for Haines and the People of Californa. "[T]hey provide merchant accounts to these offshore casinos; they make two to five percent on each of these online gambling transactions.

"This case is not going away," insists Rothken. "The worst case scenario is we'll name a couple of online casinos and move forward."

Judge McGivern has issued a tentative ruling allowing the case to proceed. He's expected issue a final ruling sometime next week.

To meet the attorneys for both sides, click on the video icon above.