In order to preserve the ability to continue placing Internet gambling advertising with American media outlets, the online gambling industry, along with its various trade groups, must consider meeting the government’s threats head on with decisive action. Hopes that someone else will address this problem or the infamous “wait and see” approach are not viable options if advertising rights are to be preserved in the current political climate. A narrow window of opportunity may be available for the industry to mount a constitutional challenge in response to the threats and intimidation emanating from the Eastern District of Missouri. Title 28 U.S.C. 2201 & 2202 allow a litigant to seek a “declaratory judgment” as to the legality or constitutionality of a contract, statute, or governmental action. In order for one to mount such a challenge, the plaintiff(s) must have “standing” which is generally defined as a recognizable stake in the controversy. The threatened aiding and abetting charges may well provide that standing to allow an industry response in the form of a test case. Actual injury has occurred to various gambling sites, in that media outlets have pulled online gambling advertising in response to the government’s threats, resulting in substantial lost revenues.[20]

Such test cases are common in other industries. For example, when the video game industry was threatened with the enactment of a rash of local ordinances prohibiting minors from accessing violent video games, its trade association brought a test case seeking to invalidate such ordinances on First Amendment grounds.[21] In that case, the trade association prevailed, and the ordinance was invalidated.[22] While nothing in this article constitutes legal advice as to the viability of such a challenge as directed to the current gambling advertising crisis, such a response should be considered and potentially pursued given the effectiveness of similar challenges in other industries. The industry should also carefully consider a media blitz focused on educating advertising outlets and consumers on the issues addressed herein. Private educational efforts directed at the legal departments of specific outlets may also be in order. Irrespective of the response option selected, decisiveness and timing are critical. Should the government actually charge advertisers or media outlets with aiding and abetting offenses, the opportunity to mount an industry-funded test case may be lost. Once a prosecution occurs, the government will likely argue that any constitutional concerns relating to the policy of charging advertisers can be readily decided in defense of the criminal charges, and need not be considered in a suit for declaratory judgment. The government has a track record of making such arguments, and therefore any hesitation may work against the industry.

Conclusion

The current investigation and intimidation of online gambling advertising outlets represents another chapter in the story of hostility towards First Amendment rights that seems apparent in the current political administration. The battle lines should be drawn here as a victory by the government in this circumstance will both embolden the U.S. Justice Department to ramp up its effort against the industry and result in substantial loss of advertising outlets.

[1] Igamingnews.com, US Court Subpoenas Gaming Portals (9.30.03). [2] Correspondence from John G. Malcolm, Deputy Asst. Attorney General, Criminal Division, United States Department of Justice (06.11.03) A copy of the letter can be viewed at http://www.igamingnews.com/articles/files/NAB_letter-030611.pdf [3] Id. The reference to “misleading” advertising is significant as will be discussed, infra. [4] Igamingnews.com, US Court Subpoenas Gambling Portals, (09.30.03). [5] Press Release, DOJ Serves Illegal Subpoenas for Online Gaming, www.WinnerOnline.com (10.30.03). [6] Id. [7] United States v. Indelicato, 611 F.2d 376, 385 (1st Cir. 1979); See also United States v. Longoria, 569 F.2d 422, 425 (5th Cir. 1978). [8] Mercer v. Jaffey, Snider, Raitt, Heuer P.C., 713 F.Supp. 1019 (W.D. Mich. 1989) [discussing aiding and abetting in the context of securities fraud]. [9] 18 USC § 2(a). [10]18 USC § 2 (b). [11] US v. Cohen, 260 F.3d 68, 77 (2nd Cir. 2001). [12] Correspondence from John G. Malcolm, Deputy Asst. Attorney General, Criminal Division, United States Department of Justice (06.11.03) A copy of the letter can be viewed at http://www.igamingnews.com/articles/files/NAB_letter-030611.pdf. [13] Id. [14] Compare United States v. Cohen, 260 F.3d 68 (2nd Cir. 2001) [Finding that the Wire Act prohibits Internet gambling in some forms.] with In re MasterCard International, Inc., Internet Gambling Litigation, 132 F.Supp.2d 468 (E.D. LA 2001) aff’d 313 F.3d 257 (5th Cir. 2002) [Finding that the Wire Act does not prohibit Internet gambling.] [15] The closest analogy can be drawn to the concept of aiding and abetting intellectual property infringement where advertising has been found to be a sufficient basis for a claim of inducement to infringe. See: New Hampshire INS. Co. v. L.Chaidesconst. Co., Inc., 847 F.Supp 1452 (N.D. Cal. 1994); Continental INS. Co. v. Del Astra Industries, Inc., 1992 WL 471300 (N.D. Cal. 1992). [16] See Novartis Corp., v. FTC, 223 F.3d 783 (DC Cir. 2000). [17] 44 Liquormart, Inc., v. Rhode Island, 517 U.S. 484, 116 S.Ct. 1495, 135 L.E.D 2d 711 (1996). [18] Greater New Orleans Broadcasting Association, Inc., v. United States, 527 U.S. 173, 119 S.Ct. 1923, 144 L.E.D.2d 161 (1999). [19] See Id. [20] See FN 5 [21] Interactive Digital Software Association v. St. Louis County, 329 F.3d 954 (8th Cir. 2003). [22] Id.

Gambling Advertising Complaints Against

Lawrence G. Walters, Esq., is a partner in the national law firm Walters Law Group. Mr. Walters represents clients involved in all aspects of online gaming operations. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at [email protected], through his website: www.GameAttorneys.com, or via AOL Screen Name: “Webattorney.”