The purpose of the PMIA was to provide resume and marketing fodder for Jed, Emile and John. It’s like being president of a high school club: You don’t have to accomplish anything, but you can list your “officer” status on college applications.

As we saw, Emile has already started using it in his NewsFutures marketing. So, the project has actually been a great success for its true purposes!

Its our responsibility to call bullshit on this, and we failed. The PMIA is a fake organization, and nobody deserves any extra street-cred for “leading” or “founding” it.

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Some background: on July 6, Betcha.com filed a declaratory relief action against the Commission — we’re asking a court to rule on the legal propriety of the Betcha product. The Commission knew this, but raided our office on July 9, anyway. During the raid, Rick Herrington, the Commission’s Chief Enforcement Officer, told my wife he didn’t know what they’d do with the confiscated items, but didn’t rule out selling them. He also told her that a court’s subsequent decision didn’t matter because he’d already determined that Betcha was breaking the law.

He wasn’t kidding.

On Saturday, I received notice (postmarked July 13) that the Commission was instituting forfeiture proceedings against the property they confiscated in the office raid — several computers, a multi-function printer/fax machine, blank compact discs, computer programming manuals and the like. The Commission is going to sell our stuff.

This is all quite troubling. First, unless you count Mr. Herrington’s “they’re committing a crime” assertion, neither I nor Betcha has been charged with one. No indictment, no judge, no jury, nothing other than Mr. Herrington’s “they’re guilty.” Second, the Commission knows there’s a civil action pending against them. Rather than wait for the court’s determination, however, they’re proceeding unwavered. (If that’s not contempt for the judicial process, I don’t know what is.) Finally, there’s no nexus here between the alleged illegal activity and the property in question. As to the computers, the Commission knows or should know that we purchased them months before we launched Betcha.com, so there’s no chance they were purchased with proceeds from our alleged illegal activity. Nor does the Commission seem to care whether the property was used in the commission of a crime. It’s very difficult to argue, for example, that blank compact discs were used in illegal activity. They are, after all, blank.

(If you’re wondering whether there’s anything we can do about this, the answer is “no.” Under Washington law, the Commission has immunity from liability for any actions they take in furtherance of enforcing the law. That’s not their fault: the Washington legislature created a system that all but invited a Gestapo. The current crew just took the invite.)

This isn’t particularly surprising given the way they’ve played fast and loose with the law. At a hearing on Tuesday, for example, Assistant Attorney General Jerry Ackerman argued in open court that the law entitled the Commission to a liberal interpretation of its laws vis-a-vis Betcha. (The AG’s office does the Commission’s prosecutorial bidding.) Not quite. Insofar as the Commission is entitled to the liberal construction of anything, it is memorialized in RCW 9.46.010, which states that “(a)ll factors incident to the activities authorized in this chapter shall be closely controlled, and the provisions of this chapter shall be liberally construed to achieve such end.” The Commission, however, has argued to the roof tops that Betcha is not authorized by law. How that liberal construction provision applies to Betcha, then, is beyond me.

The Commission’s contempt for the judicial process is rivaled only by its disregard for constitutional rights of Washington citizens. Last year, they busted a Bellingham man for running a web site that included articles about online poker — First Amendment be damned. The bust was based on a law that has been criticized on First Amendment grounds (1|2) and is now being challenged in court on other constitutional grounds. In an article written about that law, Commission Director Rick Day is alleged to have suggested that people who are unsure about putting gambling-related information on their Web site should write the Commission to ask permission.

Citizens asking the government for permission to speak: is that how it’s supposed to work?

None of this compares to the contempt in which they’ve held the rights of Betcha’s investors and employees. They’ve disregarded the well-established constitutional principle that citizens are entitled to read criminal statutes narrowly so that they can determine what conduct is and is not permissible in favor of a principle that amounts to “whatever we say goes.” They’ve shown up at the homes of Betcha employees. They’ve, to be kind, played fast and loose with both the facts and the law. And now they’re going to sell the property they seized from our offices — all purchased with our investors’ cash — without even charging us with a crime!

All of this should be of great concern to Washington residents as well as anyone who has even the slightest fondness for liberty. If the Commission is entitled to a “whatever we say goes” approach — and at least one Commission officer, a foot soldier named Lee Streitz, has told me they are — then we truly have a roving Gestapo on our hands. The Commission makes the law, they adjudicate it, and they mete out the punishment. Today Betcha’s in its crosshairs. Tomorrow it could be anyone in Washington who plays online poker.

All this has we wondering: why bother even having gambling laws in Washington? If the Commission is free to make up its own definitions of the law, and act as though the court system does not exist, then why not just scrap existing law in favor of a simply worded new one: “Whatever the Commission says goes.”

The world has seen such regimes before. The most notorious one ended in 1945.

NOTE: This entry was originally posted on the Nick Knacks blog on Betcha.com. The author can be contacted at nickj at betcha.com.

What Do We Mean When We Talk About Intuition? – by James Surowiecki

[...] This suggests that the real challenge is figuring out which problems can be solved by rapid cognition and which are better solved by a calculating, rational approach. [...]

Challenging the Standard Model of Decision-Making – by Malcolm Gladwell

[...] The war game that I write about, which was the most expensive and most elaborate war game ever conducted in history ($500 million dollars!), was a preview of the Iraq War. One side played the United States. Van Riper, essentially, played Saddam Hussein. And van Riper won, hands down, sinking half the U.S. Navy on the second day of the war. How did that happen? Because at the moment he attacked the U.S. Forces, they were so caught up in their computers and charts and systems analysis and complex matrixes that they had lost the ability to engage in the flexible, free-wheeling, instinctive thinking that is essential in the midst of battle. [...]

The Virtues of Group Decision-Making – by James Surowiecki

[...] To me, that’s one of the (and maybe the) great virtues of collective decision-making: It doesn’t matter when an individual makes a mistake. As long as the group is diverse and independent enough, the errors get corrected and you’re left with the knowledge. [...]

The Biases and Delusions of Experts – by Malcolm Gladwell

[...] My survey of Fortune 500 CEOs, as you mentioned, revealed that, with very few exceptions, they are almost all tall. Are CEOs chosen whimsically? Not at all. Committees spend weeks and months in deliberation. But at the end of the day they still end up overwhelmingly picking tall men. Deliberation makes us more confident in our decision. But I’m not sure it makes the decision itself more accurate and free of bias. [...]

Which Information Really Does Matter? – by James Surowiecki

[...] I’ve thought for a while now that one of the reasons why the collective decision-making mechanisms I write about in my book—like, for instance, betting markets—work well is that in part they aggregate intuitions and impressions that people can’t necessarily articulate, but that are nonetheless real and valuable. [...]

How To Improve the Decision-Making Environment – by Malcolm Gladwell

[...] For instance, one of the really interesting facts about police work is that an officer behaves much better—makes better decisions, fires his gun less frequently, has fewer complaints filed against him—when he is by himself than when he is paired with a partner. Officers on their own are far more cautious. Without the emboldening presence of a companion, they take far fewer risks. They don’t pick fights, or put themselves into nearly as many ambiguous or dangerous situations, because they know they have no one looking out for them. [...]

[...] He’s relaxed here, lounging in shorts and flip-flops, occasionally leaning over to his computer to check incoming e-mail, although he chooses his words with great caution, smiles infrequently and limits his eye contact. [...]

page 6:

[...] The first would have to be the 1987 drug bust in which he was implicated. This is a matter of public record for anyone who bothers to dig up the Court of Queen’s Bench of New Brunswick record F/CR/4/88, a sentencing document prepared by the Honorable Justice David M. Dickson. (David Baines, a long-time investigative journalist at The Vancouver Sun, broke the story last year.) In September, 1987, police busted a smuggling operation involving the import of 750 pounds of marijuana to Canada from Jamaica. Four men were charged: Calvin Ayre’s father, Ken; William (Bill) Roberts (living common law with Calvin’s sister at the time); Bill’s elder brother Patrick Roberts, and a man named Frank Maddock. The plan was a daring one, although doomed. Patrick bought a plane and flew to New Jersey to have long-range fuel tanks installed. Unwittingly, he also took on-board a tracking device, as the fuel tank installers were actually American customs officials. Roberts then flew to the Bahamas, of which Justice Dickson wrote: “Patrick Roberts, I may say, was, it seems, through this period in Nassau, to have been in company if not all the time certainly a lot of the time with another gentleman who is the son of one of the present accused and undoubtedly played a part in this whole scheme or was part of the whole arrangement, because that third party there had contact with the three accused here and was making phone calls back and forth.” And later: “Certainly the operation of the other chap with Roberts in the Bahamas appears to have been an important one.” Police testimony during the trial identified the third party as Calvin Ayre. Still, Ayre wasn’t charged. But the incident did point him onward to another important narrative turn missing from the official bio.

In prison for his role in the smuggling operation, Patrick Roberts met Erich Brunnhuber, a legendary Vancouver Stock Exchange scamster, infamous on Howe Street for his role in promoting stock that crashed on the VSE’s 1984 Black Friday. Some time in 1990, after they were both released, Roberts introduced Brunnhuber to Ayre. Roberts, by this point, had been given power of attorney over the financial affairs of the elderly majority owner of Bicer Medical Systems, a company that made heart valves. Ayre, being a friend of Roberts’s and a recent MBA graduate (City University, Seattle), was installed as president of the company. Within months, Ayre and Roberts had a disagreement that led to them parting ways. Roberts says the falling-out related to Brunnhuber, whom Ayre had involved in Bicer affairs despite his stock fraud conviction. And according to B.C. Securities Commission documents, Ayre assumed full control of the company in September, 1990. The company crashed and burned in less than a year. Trading in Bicer shares was halted and subsequently suspended in July, 1991. Bicer was delisted in March, 1992. The commission later found that Ayre had made distributions of shares without a prospectus, that he’d acquired large blocks of Bicer shares personally without disclosing these acquisitions, and that he’d failed to file insider reports disclosing his trading of more than three million Bicer shares, over which he had “beneficial ownership of, or control or direction over.” Ayre was fined $10,000 and banned from the exchange for 20 years, specifically from “becoming or acting as a director or officer of any reporting issuer” or “engaging in any investor relations activities.” [...]

Shocking.