Gambling News - May 2005 Edition

"Online Betting Ad Draws Scrutiny"

Esquire magazine subpoenaed to explain 8-page Ad on online gambling.

The U.S. anti online gambling policy on is based on the Wire Act of 1960, which prohibited the use of phone lines for the placing wagers. The Justice Department contends that in terms of the Wire Act, Internet gambling is illegal in the United States. Therefore, the U.S. goes after anyone doing business with an Internet gambling company. This includes the operators of the online gambling sites, advertisers, banks, as well as payment transfer companies.

The U.S. is not planning to ease up on its prohibition against online gambling, despite of the WTO’s recent ruling. Moreover, the U.S. is continuing to pursue a tough policy that will penalize any company or organization that does business with online gambling companies. The U.S. Justice Department has subpoenaed Esquire magazine for information on an online gambling site advertisement included in Esquire’s April issue as evidence of this no gambling policy. The advertisement was about the online poker site, Bodog.com in an eight-page insert.

Since it is an informational subpoena and not a request for editorial information, Esquire plans on complying with the Justice Department’s subpoena. Editorial information is, of course, protected by the constitution.

Other advertisers are carefully watching how things play out between the U.S. Justice Department and Esquire magazine.

There have been many challenges to U.S. Internet gambling policy recently, both on the domestic and international fronts. The North Dakota legislature spearheaded an effort to legalize some forms of Internet gambling and Casino City Inc., operator of CasinoCity.com, produced argument that the Justice Department’s efforts to prevent Internet gambling web sites from advertising their services on the radio are a violation of commercial free-speech rights. Both challenges were ultimately dismissed but the international challenge presented by the WTO to U.S. policy on online gambling is not so easily dismissed.

The WTO’s ruling stated that U.S. prohibitions on Internet gambling discriminate against offshore gambling operators desirous of doing business with U.S. customers. The ruling, which actually includes some loop-holes that allow the U.S. to continue exercising its present policy on Internet gambling, may still present a challenge to the policy. Now the WTO is planning to issue a statement that will clarify its position regarding the scope of its ruling.

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