Gambling News - June 2005 Edition

"Lawsuit Claims Free Speech for Online Casino Ads"

CasinoCity.com files lawsuit against U.S. Department of Justice for trying to stop gambling advertising.

In a lawsuit filed on August 9 th, Casino City Inc. is asking the court to issue a declaratory ruling that online casino advertisements represent free speech and as such, are protected by the U.S. constitution. Casino City, based in Baton Rouge, La, obtains its revenue from advertising deals with offshore casinos. The casinos they advertise are legal and licensed outside the United States, but not inside the U.S.

The United States Department of Justice is waging an ongoing battle against the online gambling industry and has commenced a grand jury investigation into the efforts of American entities which publish or broadcast advertisements for offshore casinos, including major Web search engines and media companies. U.S. Government policy opposes online gambling and maintains that the offshore operations are illegal. The argument by the prosecutors for the Department of Justice is that, because the offshore gambling operations are illegal, so advertising these operations is also illegal.

But there are legal experts who disagree with this argument, claiming that it is not clear whether federal law prohibits all forms of online gambling and this leaves the issue of legality regarding the advertisements in the air. Other experts argue that even if online gambling is definitely illegal, the right to advertise online gambling sites is still clearly protected by the U.S. constitution because of the right to commercial speech.

This last argument prompted Casino City Inc., which operates an online Casino directory, CasinoCity.com, to file a lawsuit against the U.S. Department of Justice for violating free speech which is constitutionally protected. The Casino City lawyers argue that the DOJ violates the right to free speech when it threatens American publishers with breaking the law if they advertise for gambling websites by displaying, broadcasting or printing advertisements.

Offshore casinos are anxiously monitoring the lawsuit as the results will have far-reaching consequences for their businesses. At least half of all gamblers at online gambling sites are from the United States. If these sites wee to be stopped from advertising there would be a serious fall-off of customers and the numbers of new customers would drop drastically. Other media companies, who are at present advertising offshore casinos or considering doing so, would be hurt.

Several major broadcasters, including the radio giants Clear Channel Communications and Infinity Broadcasting and Discovery Networks of cable television have agreed that they will no longer advertise offshore casinos.

Summing up the situation, Barry Richard, a lawyer for Casino City, who incidentally represented President Bush before the Florida Supreme Court during the 2000 election dispute, said that advertisements for offshore casinos deserve the same constitutional protection that advertisements in a national magazine for a casino in Las Vegas. He said, “even though Las Vegas casinos are not licensed to operate in California, it is not illegal to advertise Las Vegas casinos in California.”

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