Internet giants nailed for online gambling ads

[jetset]

INTERNET GIANTS NAILED FOR ONLINE GAMBLING ADS

Major US companies pay millions in settlement, agree to halt online gambling ads

The US Department of Justice has scored another victory in its war against online gambling, intimidating US giant Internet companies Microsoft, Google and Yahoo! into paying millions in fines and to desist from carrying online gambling advertising.

The US Attorney's office in St. Louis announced the settlements, believed to involve some $31.5 million today (Wednesday), saying that the companies concerned "did not admit or deny" federal prosecutors' claims that as much as a decade of the advertising aided and abetted a crime specifically online gambling.

U.S. Attorney Catherine Hanaway said that the settlement ends years of investigative work and 12 to 17 months of negotiations with the companies, and brings the total of Internet gambling-related settlements reached with the St. Louis office to $70 million.

The St. Louis Despatch reports that one of the specialties of Hanaway's office is the prosecution of online gambling activities. Her office recently reached civil and criminal settlements with BetOnSports, once one of the largest online gaming companies, that has closed the company down and left its executives detained awaiting trial.

Google agreed to pay $3 million cash. Microsoft agreed to pay $4.5 million to the U.S., plus $7.5 million to the International Centre for Missing and Exploited Children and $9 million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal. Yahoo! agreed to pay $3 million and run their own $4.5 million, three-year ad campaign.

 

[winbig]

Google agreed to pay $3 million cash. Microsoft agreed to pay $4.5 million to the U.S., plus $7.5 million to the International Centre for Missing and Exploited Children

IMO, ALL money derived from this "bust" should go to the latter.

and $9 million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal. Yahoo! agreed to pay $3 million and run their own $4.5 million, three-year ad campaign.

Since when is online gambling illegal? It's only illegal in a handful of states, NOT THE WHOLE COUNTRY.

@)(#$ like this just pisses me off....anyone else?

 

[vinylweatherman]

This just looks like the US is only after money. They have no real interest in stopping the online market unless they can make large sums of money out of it.

These settlements seem to be retrospective, being applied to activity before the legal state of online gambling had been "clarified" by the introduction of actual enforcement measures last October.

Rest assured the rest of the world sees this for what it is, the pursuit of money for US coffers from those companies that have enough of it to part with a few "bribes" to make the problem go away.
It looks just like state sponsored blackmail. It would be illegal if a citizen were to do it.

 

[jetset]

It always astonishes me that the DoJ is apparently able to intimidate major companies without ever having to defend its opinion that online gambling is federally illegal in the USA - the leaders of these companies seem to be easily cowed into submission and quite prepared to pay up to make it all go away.

I wonder what "fee" they will charge 888.com and Party Gaming, both of which are in talks with the DoJ on their pre-UIGEA operations in the USA? It looks as if these companies are already resigned to coughing up - it's just the quantum they're waiting to hear about.

 

[lots0]

It always astonishes me that the DoJ is apparently able to intimidate major companies without ever having to defend its opinion that online gambling is federally illegal in the USA

Two words - Legal Fees

It would cost those companies far more to defend their position in court.
Each one of these companies could be paying well over 30 Million EACH just for legal fees if they decided to fight in court.

So it still all boils down to money.

DoJ lawyer to Company X lawyer; We can continue to appeal, file motions and delay this until your great grandchildren are old and retired... Or you can just pay us off now and we'll go away.

Simple strong arm extortion tactics, the DoJ learned these tactics from the Mafia in the 50's and 60's.

 

[Mousey]

Intimidate, coerce, extort.... They have the thousand pound gorilla act down to a science.

and $9 million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal

I want one of those DoJ folks to SHOW me the law(s) that make gambling on the internet illegal.

Oh. And another thing. As far as I know the US doesn't OWN the entire freaking internet and Google, etc. could legally accept advertising from companies that are legal in their respective jurisdictions, couldn't they? But they'd just have to block US citizens from accessing those sites. Now that would sit real well with the public, wouldn't it? So the DoJ does the old, my way or the highway routine, so we don't have to get into that sticky business of monitoring and blocking what US folks view on the internet. It's censorship either way.

And for me, it's not just about the gambling. It's about politicians who wish to govern my morals and sneak legislation through in the middle of the night to get their way. It's about the DoJ behaving as if online gambling is illegal, as if wishing it were true, makes it true, and make damn well sure none of the cases go to court! And mark my words, unless someone stops them, this online gambling thing won't be the last of their freakin' crusades.

I'm tired. I'm all out of rant.

 

[LaurieJim]

Two words - Legal Fees

It would cost those companies far more to defend their position in court.
Each one of these companies could be paying well over 30 Million EACH just for legal fees if they decided to fight in court.

So it still all boils down to money.

DoJ lawyer to Company X lawyer; We can continue to appeal, file motions and delay this until your great grandchildren are old and retired... Or you can just pay us off now and we'll go away.

Simple strong arm extortion tactics, the DoJ learned these tactics from the Mafia in the 50's and 60's.

............couldnt have put it better!!

 

[Mousey]

and $9 million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal

Anyone remember Orwell's 1984 and 'doublethink'?

... the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. ... To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one deniesall this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.

 

[sdaddy]

and $9 million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal. Yahoo! agreed to pay $3 million and run their own $4.5 million, three-year ad campaign.

Since when is online gambling illegal? It's only illegal in a handful of states, NOT THE WHOLE COUNTRY.

Well US Attorney Hanaway, in her testimony before the Judiciary Committee last month, did offer the opinion that the Federal Wire Act makes ALL online gambling illegal in the US. Although that is not supported by most legal experts, what really bothers me is that she had no answer as to why her office never, for example, goes after the domestic horse racing industry, which operates its online gambling services right out in the open. To the rest of the world it's understandable why this sort of selective prosecution, which ignores the powerful domestic online gambling interests, can be viewed as hypocritical and protectionist.

 

[jetset]

Kyl rides again

The recently promoted Senator Jon Kyl is active again, going after Barney Frank's HR 2046 IGREA before it hits the floor - he must be starting to worry about the growing number of co-sponsors the IGREA has accumulated (now 45)

He had this letter read into the record of Congress on Tuesday this week (Dec. 18), together with a copy of the original AG's letter:

Mr. President,

I would like my colleagues to be aware of an important letter signed by 45 State attorneys general expressing "grave concerns'' about Representative Barney Frank's Internet Gambling Regulation and Enforcement Act, H.R. 2046.

The State attorneys general note that the recently enacted Unlawful
Internet Gambling Enforcement Act of 2006 has "effectively driven many
illicit gambling operators from the American marketplace.'' The Frank bill
"proposes to do the opposite, by replacing state regulations with a federal
licensing program that would permit Internet gambling companies to do
business with U.S. customers.''

The letter continues:

A federal license would supersede any state enforcement action, because #
5387 in H.R. 2046 would grant an affirmative defense against any prosecution
or enforcement action under any Federal or State law to any person who
possesses a valid license and complies with the requirements of H.R. 2046.

This divestment of state gambling enforcement power is sweeping and
unprecedented.

One final but very important point from the letter is the impact of the
so-called "opt-out'' provisions. Specifically, the letter reads:

The opt-outs may prove illusory. They will likely be challenged before
the World Trade Organization. The World Trade Organization has already shown itself to be hostile to U.S. restrictions on Internet gambling . If it
strikes down state opt-outs as unduly restrictive of trade, the way will be
open to the greatest expansion of legalized gambling in American history and
near total preemption of State laws restricting Internet gambling .

The Frank bill is unacceptable to the State attorneys general and it
ought to be unacceptable to Members of Congress as well. I urge my
colleagues to oppose the Frank bill or any similar proposals that would
create a permissive Federal licensing scheme for Internet gambling .

I ask unanimous consent to have printed in the Record the letter from the
National Association of Attorneys General.

There being no objection, the material was ordered to be printed in the
record.....

 

[jetset]

More legal hassles for Yahoo and Google

SEARCH GIANTS NOW FACE CIVIL LITIGATION

Yahoo! and Google the targets for class action

Last week's $31.5 million settlement on with the US federal authorities over claimed online gambling advertising infringements may have removed Google and Yahoo! from the federal radar, but there is more litigation in store for them according to a Californian law company.

A class-action lawsuit was filed in the California Superior Court in August 2004 alleging that Yahoo! and Google, along with several other popular websites, made hundreds of millions of dollars by allowing advertisements "for illegal online gambling Web sites" to appear on the search engine pages....and the case is set to be argued on February 11.

This will further test the liability of these companies in California, and will ask the courts to further restrict the ability of these Internet giants from similar action in the future, says a statement from the legal partnership Hagens Berman Sobol Shapiro (HBSS).

While the multi-million dollar settlements reached on December 19, 2007 resolve federal criminal charges against Google and Yahoo!, the companies neither contest nor admit they received payments from Internet gambling advertisers, according to published reports.

"We believe these companies have been profiting from this illegal practice for more than a decade, and we believe the agreement with the government does not go far enough," said Reed Kathrein, lead attorney in the case and partner at HHBS. "The settlements are a great victory and a tacit admission by these online advertisers, but there is still more work to do in holding these companies accountable for the harm they have done to Californians, and to keep them and others from continuing these practices.

"Given the amounts the huge profits we believe they made, we believe these relatively small forfeiture penalties will not deter them or others in the future," Kathrein added.

According to Kathrein, he intends to argue for injunctive and declaratory relief at the February trial in hopes to stop Google and Yahoo! from allowing the ads to appear on their sites in the future, and forcing the companies to acknowledge that the practice is illegal.

The complaint also calls for disgorgement of profits the companies earned from online advertisers looking to attract gamblers to their Web sites -- a figure expected to exceed hundreds of millions of dollars. The complaint seeks to have the disgorged profits go to benefit education and rehabilitation efforts aimed at gambling addiction. The court previously decided, however, that state laws prohibit the court from aiding gamblers in recovering money, an issue HBSS plans to appeal after the trial.

Under the Federal aiding and abetting statute, procuring participants for illegal activity, such as online gambling, is unlawful.

HBSS is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it has developed a nationally recognised practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a $300 million settlement in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date.

HBSS served as counsel in an $850 million Washington Public Power Supply settlement and represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history.

 

[Mousey]

First off ... let me ...

Now.... I find all this censorship very interesting. As far as I know gambling and public listed companies like 888, Playtech, etc. are perfectly legal. So how can the US claim the right to tell companies they can't advertise casinos/poker rooms that are perfectly legal? I also wonder why no one will go to the expense of actually challenging the USA's right to dictate what is legal and illegal on the entire freakin' internet. **heavy sigh**

This Thousand Pound Gorilla act is working -- bringing in untold millions of dollars to the US -- and no one is willing or able to take on the USA's rabid anti-gambling stormtroopers and challege her peculiar stance.

Here's something local I find interesting. Gambling is illegal in Ala. (Except for the 'fake' slots/vid lottery at the dog/horse tracks. ) But the Mississippi casinos advertise on the local Alabama TV stations very frequently. Personally, I think that's fine , but I would think that the state of Alabama would take exception to advertising something that's illegal to do IN state, plus it's luring our citizens to carry our money across state lines and spend it on gambling.

 

[winbig]

but I would think that the state of Alabama would take exception to advertising something that's illegal to do IN state, plus it's luring our citizens to carry our money across state lines and spend it on gambling.

Depends....how strict are they on reporting? I know at the slot parlors here in PA, they require you to report any win > $1200! Talk about rediculous...

If you've got $1200 in a machine, it makes more sense to play it down to $1100 or even $1000...you're saving more $

 

[NASHVEGAS]

Depends....how strict are they on reporting? I know at the slot parlors here in PA, they require you to report any win > $1200! Talk about rediculous...

If you've got $1200 in a machine, it makes more sense to play it down to $1100 or even $1000...you're saving more $

Federally that would not be true if you had enough gambling losses during that year only. Not sure if state laws vary with some states having no income tax. A little off subject but NFL and other athletes are taxed according to the equally divided salary they earn for each game subject to the state where the game occurs and not their place of residence. Guys on some teams could end up paying state taxes for all sixteen games including the eigth road games whereas a player in Tennessee which has no state income tax limits the most a player would be exposed to state income taxes to eight road games. The Titan players are really lucky as they catch one road game and sometimes 2 in Florida a year which also has no state income tax.....@Mousey, does Alabama have billboard advertising for the Mississippi casinos?? Billboards are plastered here for mostly Tunica,Metropolis,IL and Evansville,IN!