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The US Justice Department is serious about its crackdown on online gambling. Last year they forced the major credit card companies and US based Pay-Pal to stop processing transactions for online gaming. Now they have reached into the legal departments of the worlds two largest search engines, Google and Yahoo.
Traditionally, the US Government has had a major problem in their fight against online casinos. Since millions of dollars are at stake and taxation is a major issue for most casino owners, most online casinos are located in territories outside of American legal jurisdiction. If the Government can’t target the casino owners directly, the US Feds are going after websites and search engines that provide advertising space for online gambling companies. Citing the Interstate Wire Act of 1961, also known as the Federal Wire Act, the Justice Department is targeting website owners who “aid and abet” what the US Government considers an illegal activity. This week, the US Feds scored a major victory in their fight against offshore companies taking US dollars when both Google and Yahoo announced they would no longer run advertisments for online casinos. What this means exactly is still in question and at the time of this writing, I have had the most difficult time getting anyone to offer a solid opinion, much less an attributable quote that actually tells us what’s going on.
As quoted by the Associated Press, Overture spokesperson Jennifer Stephens attributed the casino ban to a “lack of clarity in the current environment” and a desire to conform with its parent company’s policies. Yahoo stopped displaying banner advertising for Online Casinos in late 2002. Google spokesperson David Krane was quoted by AP stating the ban will, “…help provide the best search and advertising experience for its users.” (ed note: uh-huh) In other words, neither Overture or Google like this but are accepting it, at least as it applies to advertising in the United States. Yahoo will continue to serve casino advertising opportunities in 14 countries outside of the United States.
There are many questions raised by this move and, as mentioned before, very few answers are forthcoming. We would like to know if this move is targeted at paid-advertisments only or will the traditional listings be effected? What about US-based online gaming such as off-track betting sites run by the New York’s Off Track Betting Corporation? When will the US Justice Department go after independent website owners running banners for online casinos?
Can the Feds Control Traditional Listings?
This is a good question, one we don’t have a lot of answers for. The short answer is, of course they can, if they really want to. Google has already bowed to pressure in other cases, most notably one brought by the Church of Scientology against Google for websites that gave away Scientologist secrets and other materials considered copyright infringement by Scientology. Google directly manipulated its traditional listings on behalf of the Scientologist organization by removing links to contested materials. In thier defense, Google did put in place a link to www.chillingeffects.org, a pro-First Amendment website founded by the Electronic Frontier Foundation and several law school clinics. A note from the US Justice department will likely carry as much weight as a note from Scientology’s team of lawyers. The same can be said for Yahoo.
On the other hand, traditional search engine returns pages are much more difficult to manage for algorithmic search tools. The advent of personalized and local search features will likely make it easier for search engines to limit listings that cross legal barriers. Another recent example is the US Government’s fight against Canadian online pharmacies selling prescription drugs to US customers at a fraction of the cost charged by US pharmacies. Both Google and Yahoo have stated they would no longer accept advertising for online pharmacies though Google continues to display AdWords for the sector. Both Google and Yahoo continue to display literally millions of traditional listings under the keyword phrase “online drugs”. We don’t see why there would be any difference for online gaming.
There is another aspect to this case that should not go unnoticed, especially by site operators living outside the United States.
US Law vs International Law
Recently the United States has made a practice of ignoring International laws, treaties and agreements when it suits the aims of the US Government’s agenda. Nevertheless, the ban on casino advertising is being disputed at the World Trade Organization by the tiny Carribean nation of Antigua and Barbuda where over 5% of the population is employed by the online gaming industry. Antiguan government officials are arguing the ban constitutes a restraint on trade and is designed to protect the massive gaming interests of American casino operators. They may be right and may even win the case but as Canadian provinces depending on lumber revenues have learned, being right does not necessarily mean getting the US Government to comply with International agreements it signed. Even if Antigua wins the case, as is likely under International law, chances are it will make little difference while costing the tiny state a lot of money. Regardless of International laws, treaties and agreements, the US Goverment considers its national interests to trump all else. Like Canadians doing business with Cuba, (a perfectly legal practice in Canada), online casino operators and those providing advertising for them may find themselves in deep trouble with US Immigration, which is now run by the Department for Homeland Security.
