Illegal Gambling Debt Case Moves South Dakota To Change Law

Gerald Neve lost $1,500 gambling to the late Donald L. Davis back in 1992 in South Dakota. Davis proceeded to lend Neve $33,000 the following year, and when time came to pay up, Neve ran to the law.

Neve won his court case to have the debt ruled invalid in 2005. The court ruled that because part of the debt was accrued during an illegal gambling activity, the entire amount of the loan would be void.

Davis appealed the case to the state Supreme Court, but passed away while waiting for the appeal. Neve settled with the Davis estate, but the Supreme Court still had to rule on the legality of the case. They reinforced with the lower court ruling.

That ruling has led legislators to take steps during this session to rewrite the law. On Wednesday, lawmakers completed that process by voting in favor of the rewritten law that would close the loophole Neve used to steer clear of his debt.

The new law states that only the part of a debt that is the result of illegal gambling can be thrown out. Anyone facing a similar suit will still be responsible for the rest of the loan.

With gambling becoming more prevalent over the past decade, several of these obscure laws have come into play in different states. Although rare that someone lends another person money after not paying a gambling debt, the South Dakota legislature decided it would be better to close the loophole than keep the former law in tact.

February 25, 2010
Posted By Tom Jones
Staff Editor, CasinoGamblingWeb.com
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