Cracking Down On Gambling Ads

(AP) NEW YORK Bookmaking and high-stakes poker have long been a thing of smoky, back-room clubs in New York, and for good reason: Most organized gambling is illegal in the Big Apple.

But you wouldn't know it driving through Manhattan.

Giant billboards, some several stories high, brazenly advertise Internet bookies like Sportsbook.com. Promotions for the gambling company BetUS.com air regularly on Sirius Satellite Radio. Fantasy football magazines at newsstands are packed with ads for Web casinos.

But a growing number of state and federal law enforcement agencies say such ads are illegal.

"Gaming and bookmaking are not legal in New York, so anyone who markets to a New Yorker may be in violation of New York state law," said Paul Larrabee, a spokesman for New York Attorney General Eliot Spitzer.

Questions about the legality of the ads come amid a big crackdown on Internet gambling. President Bush signed legislation Oct. 13 prohibiting credit card and electronic fund transfer companies from processing the financial transactions U.S. players often use to settle online wagers.

Offshore Internet gambling companies have been promoting themselves heavily throughout the United States in recent years, contributing to confusion over whether the sites, or even the ads themselves, are legal.

The Justice Department has been warning since 2003 that publishers and broadcasters who advertise gambling sites could be prosecuted for aiding and abetting a crime.

Every state has its own rules regarding gambling, but use of "wire communications" to facilitate wagering on sports has been a federal crime for decades.

Actual prosecutions of advertisers for promoting gambling are rare, however, and media companies accepting the ads insist they are breaking no law.

That position sometimes hangs on a loose interpretation of what constitutes a gambling ad.

ESPN, for example, runs ads for online poker sites during its broadcasts of the Word Series of Poker, but says it does so only for Web pages that don't actually process bets.

"We only accept advertising for educational, learn-to-play, for-free sites," said ESPN spokeswoman Keri Potts.

Many of these so-called "educational" sites, however, are simply companion pages to full-fledged gambling operations, easily reachable with a few mouse clicks or by changing the last few characters of a Web address from ".net" to ".com."


Potts said it wasn't up to ESPN to investigate those affiliations.

"Is it really for us to be regulating how they operate their businesses?" she said.

The Justice Department has taken a different view. In 2004 federal authorities pressured Discovery Communications Inc., parent company of the Travel Channel, into forfeiting $6 million in advertising money that had come from online poker sites.

A similar arrangement was reached in January with The Sporting News, which agreed to pay a $4.2 million fine and run $3 million worth of public service announcements to resolve claims that it ran ads promoting illegal Internet gambling.

Despite those settlements, Internet gambling lawyer Lawrence G. Walters said there is uncertainty over whether running advertisements for an offshore gambling concern is illegal.

"They scare these people to death and tell them they are going to prosecute them criminally if they don't cooperate ... but I'm looking forward to the day that someone decides to fight this," he said.

Spokesmen for several online gambling services declined to be interviewed about their advertising campaigns, but maintained that their offshore services are either legal or beyond the reach of U.S. law.

Other foreign gambling outfits appeared worried. Some ceased doing business with U.S. customers immediately after the antigambling legislation was signed.

In early September, the chairman of the British online gambling company Sportingbet PLC was detained at a New York airport after officials discovered he was wanted on online gambling charges in Louisiana. The arrest came two months after the chief of another offshore wagering company, BetOnSports PLC, was arrested on racketeering charges.

New York Gov. George Pataki ultimately decided that state law didn't allow the Sportingbet executive to be extradited and he was allowed to fly home to London.

But the company may have gotten the message. The publicly traded company — which had hung billboards throughout Manhattan bearing the slogan "Everybody Bets" — sold its site, Sportsbook.com, to a company in Antigua for $1.

"The real question is: Are any of the online gambling Web sites going to bother advertising anymore?" Walters asked.

News Added: 26 October, 2006

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