Watts v. Malatesta

Casual gambler Watts (plaintiff) placed horseracing bets with professional bookmaker Malatesta (defendant), winning about $250,000 and losing about $150,000; when a New York statute banning organized (professional) gambling rendered the arrangement illegal, Watts sued to recover his losses, and Malatesta counterclaimed for the net difference he had paid out versus what he was owed. The trial court ruled for Malatesta, but the appellate court reversed, awarding Watts his losses back, and Malatesta appealed.