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State v. Granite Gate Resorts, Inc., 568 N.W.2d 715 (Minn. App. 1997) (full-text), aff’d, 576 N.W.2d 747 (Minn. 1998) (full-text).

Factual Background[]

The defendant is a Nevada corporation with a a Las Vegas-based gambling website. Its website advertised WagerNet, a service of Global Gaming Services, Ltd. of Belize, which hoped to offer international sports wagering services in the near future via its own server located in Belize. Special software would be required to access the company's facilities — they would not be offered over the Internet. The advertisement invited interested parties to contact the defendant for more information. The ad also contained a warning that users should consult local authorities about the legality of placing bets by telephone with off-shore betting facilities before registering with WagerNet.

Other information on the website stated that WagerNet would soon be operational, providing for legal electronic betting. Potential customers could also sign up for an e-mail mailing list by providing their name, postal address and e-mail address. Another service affiliated with the defendant, and advertised at the same website, was All Star Sports, which, for a fee collected by either a 900 number or by sending credit card information over the Internet, will deliver sports picks to help customers bet on sporting events.

Appellate Court Proceedings[]

The complaint was that federal law prohibits the interstate or foreign transmission of both betting information and bets by one engaged in the business of betting or wagering through wire communication facilities, including telephone wires[1] and that Minnesota law forbids commercial sports betting.

Furthermore, the Attorney General contended that WagerNet and All Star are advertising in Minnesota and are representing that such betting is lawful — which therefore violates the Minnesota Consumer Protection statutes forbidding false advertising, deceptive trade practices and consumer fraud.

The defendant argued that the court lacked jurisdiction because it had not mailed anything into or advertised in Minnesota, or accepted a bet from a Minnesota resident.

The court held that because "the [web page] ad would be on continuously on the Internet and that it had to reach national markets that included Minnesota," as would the e-mail distribution list, that the defendant had made sufficient contacts to make Minnesota jurisdiction proper. The court found:

Unlike when one puts solicitation in the mail, the Internet with its electronic mail operates tremendously more efficiently, it generates much more quickly and possesses a vast means of reaching a global audience. When one sets up and posts advertising information, one does everything necessary to reach the global Internet audience.


  1. 18 U.S.C. §1084.