Can I Include My Gambling Debts in Bankruptcy?

Man looking at the envelopes

Question: I was reading your blog and I realized that I have an issue that you have never really addressed. I owe a lot of money from gambling. I didn't gamble in Las Vegas or Atlantic City or an Indian casino in North Carolina. I got hooked on Internet gambling thru a company located overseas. It was so easy to place my bets from my house in Duluth or even on my cell phone from places like Cumming or Dunwoody.

I thought that I could win betting over the Internet on college football and on the NFL. I developed a computer program that I thought could easily predict football scores with substantial accuracy. I put tons of hours into analyzing every position like quarterback, the offensive line, receivers and backs; and I did the same for the defense with linebackers, defensive lineman and defensive backs. My program analyzed hundreds of variables including "minor" ones like where a player went to college, whether he was playing in a game near where he went to school or grew up, and even if it was likely a parent, wife or friend would be attending the contest. I quit my job at a company in Alpharetta so I could be dedicated.

When I back-tested it was amazing. I was winning almost 75% of the games. The problem was when I went live. After three months I had only won 36% of my games and I had gone thru my savings. Now I can't make my student loan payments, I'm facing eviction and I barely have enough money to eat.

I need to file bankruptcy ASAP. Can I get rid of the Internet gambling debts?

Answer: With the explosive growth in Internet gambling we are seeing this issue with greater frequency. Using the courts to enforce a debt illegally incurred is against public policy. So if the debt was derived from a non-legal activity like betting with an illegal Internet casino, then U.S. courts would not enforce that obligation. Gambling debts incurred in properly sanctioned casinos are, however, enforceable in state and federal courts. These debts are dischargeable in bankruptcy. This was not always the case, however. For many years gambling debts were not dischargeable under the bankruptcy code. But now these debts are viewed like most types of debt and they can be discharged.

We at the Sherman Law Group try to answer as many questions as possible. If you have a question, email it to us and we'll do our best to answer it. No names will be used.

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