Tags: Feds | Crack | Down | Internet | Gambling

Feds Crack Down on Internet Gambling

Thursday, 16 December 2004 12:00 AM

Furthermore, Justice has been zeroing in on U.S. companies that do business with the offshore sites, levying a $10 million fine against PayPal, and seizing $3.25 million from Discovery – alleged ill-gotten gains from running ads for Tropical Paradise, a Costa Rican poker site.

The crackdown kicked-off when Justice sent a letter to the National Association of Broadcasters, the Magazine Publishers of America and other media organizations ominously advising that any media outlet or Internet portal accepting ads for the offshore sites may be “aiding and abetting these illegal activities.”

The saber-rattling worked – in some cases.

Discovery Communications, Infinity Broadcasting, and Clear Channel Communications voluntarily pulled ads for online gambling after getting their letters. MasterCard and Visa agreed to track online wagers. Citibank and Bank of America stopped accepting charges for online bets. Internet portals Yahoo! and Google nixed accepting ads for online casinos.

But with $7.4 billion on the line, some businesses are fighting back – both in the courts of law and the court of public opinion.

Case-in-point: Casino City Inc., a Louisiana operator of Internet gambling portals, is suing Justice for violating its First Amendment rights. The lawsuit, filed in August, is reportedly the first brought against the federal government on the issue of the legality of online gambling.

On the freedom of speech issue, government lawyers have argued in the Casino City case that “advertisements that concern unlawful activity” are not protected by the First Amendment.

Even the tiny island nation of Antigua has its dukes up. Last month, Antigua won a World Trade Organization ruling that the U.S. violates international trade rules by allowing credit cards to be used for domestic gambling but not online wagering.

Hoping for victory in the Casino City case, the online gambling industry reportedly has other suits poised for filing.

Meanwhile, lobbyists are busy in Washington with an image repair mission. Best cosmetic offered – a spanking new source of tax revenue. Also under construction: the forging of alliances with the $70 billion U.S. wagering business.

The industry may concede that Justice has won the first skirmishes, but the victor in the war will most likely be determined by an American public that apparently loves to click on those wagers.

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Furthermore, Justice has been zeroing in on U.S. companies that do business with the offshore sites, levying a $10 million fine against PayPal, and seizing $3.25 million from Discovery - alleged ill-gotten gains from running ads for Tropical Paradise, a Costa Rican poker...
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2004-00-16
Thursday, 16 December 2004 12:00 AM
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