Create An Ad For An Online Gambling Company? Face Jail Time!

from the is-that-even-illegal? dept

Tue, Aug 12th 2008 8:03am — Mike Masnick

The US gov't has long had an odd fascination with stopping online gambling (except for horse racing -- which politicians engage in -- and state lotteries, for obvious reasons). Sometimes, this obsession reaches bizarre levels, such as the claim a few years back that it wasn't just illegal to run an online gambling operation, but that it was illegal to help advertise one. Most have pointed out that this has little actual legal basis, and is likely a violation of free speech rights -- but that hasn't stopped the government from using such threats.

Two years ago, the feds charged some ad execs with a whole bunch of crimes simply because they had the company BetOnSports as a client. BetOnSports, of course, was completely legal outside the US, but that didn't stop the US from claiming otherwise (even arresting BetOnSports' CEO as he was traveling through the US in a completely separate action from the lawsuit in this post). Even if it turns out that BetOnSports is somehow illegal, it makes no sense to drag in execs from a totally different company that only created promotional campaigns for BetOnSports. That hardly seems to deserve getting charged criminally.

But, when the gov't wants to put you down, it finds a way. The three ad execs have now all plead guilty in the case. Even though they had nothing to do with running the gambling site, they agreed to a plea bargain to avoid a lengthy and costly trial that could have resulted in a lot of jail time. It's not clear yet what the sentences will be in this case, as that will be announced in October, but at least some of the execs may get off without jail time. That's good, but it still remains ridiculous that they had to go through this two year ordeal just because they created promotions for the company.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: advertising, gambling, online gambling
Companies: betonsports

20 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Joe Smith, 12 Aug 2008 @ 8:20am

Abuse
The abuse of the legal system in this way is a serious problem. One of the most common legal abuses is the wide spread use of obstruction of justice charges against people who have done nothing illegal but authorities thought they were insufficiently co-operative with the out of control law enforcement agencies.
[ link to this | view in chronology ]
PaulT (profile), 12 Aug 2008 @ 8:22am

As an employee of an online gambling company in Gibraltar (yes, really), I'm tempted to make some kind of "land of the free" comment. This is just really sad, though.
[ link to this | view in chronology ]
Jake, 12 Aug 2008 @ 8:25am

On The Other Hand...
There's probably a case to be made that helping advertise a product or service that you know is violating the law makes you an accomplice. And frankly, it should not have taxed the cognitive faculties of even the guy responsible for those Yorkie Bar ads to realise that BetOnSport were skating on very thin legal ice.
[ link to this | view in chronology ]
- PaulT (profile), 12 Aug 2008 @ 8:40am
  
  Re: On The Other Hand...
  I'd check the history of the case if I were you. These were legitimate services that fell foul of the law when congress decided to "clarify" gambling laws to outlaw online gambling. Before that, I believe, the only law against it was a set of outdated clauses that were intended to stop mafia-run numbers games, not legitimate international companies.
  
  The service would not strictly have been illegal when they began to advertise it, and it's only through a rather broad interpretation of a 50 year old law that it's illegal now. FTA:
  
  "The charges in the BetOnSports case were filed using a 1960s-era law known as the Wire Act, which prohibits placing bets on sports events over the phone."
  [ link to this | view in chronology ]
  - Greg, 12 Aug 2008 @ 10:03am
    
    Re: Re: On The Other Hand...
    "...over the phone."
    
    And cable modems? I would as for a clarification of phone lines as defined in the 1960's
    [ link to this | view in chronology ]
  - eliot ness, 12 Aug 2008 @ 10:19am
    
    Re: Re: On The Other Hand...
    while you're checking the history of the case, check the history of the case. this operation was lousy w/ Gambino boys. yes, those gambinos...
    
    http://sheriff.org/about_bso/admin/media/newsdetails.cfm?pk=344&sType=M
    
    http:/ /www.gambling-law-us.com/Articles-Notes/online-gambling-arrests.htm (search this page for "fafone")
    [ link to this | view in chronology ]
Joe Smith, 12 Aug 2008 @ 10:46am

Extra territorial law
"There's probably a case to be made that helping advertise a product or service that you know is violating the law makes you an accomplice."

And if you participate in the production or distribution of half the music videos in the Western world you are probably committing a capital offense in Iran or Saudi Arabia - that does not mean that the Iranians or Saudi's would have the right to grab you and execute you if you happened to land in their country (assuming you were damn fool enough to go near either of those places).
[ link to this | view in chronology ]
MAtt, 12 Aug 2008 @ 10:50am

yeah, the other hand.
From TFA:
William Lenis, 55, pleaded guilty to interstate transportation of gambling paraphernalia. Authorities said his company, Mobile Promotions, sent motor homes to sporting events around the country to promote BetOnSports. Will Lenis, 28, and Manny Lenis, 29, worked with him in promoting BetOnSports, the government alleged.
It's probably illegal to pass out ads for a Dutch marijuana sale whether or not they ship to the US. (Not that the Dutch will ship weed to the US, but there is a parallel.) Don't mix up your feelings of gambling legality with that of promoting something illegal.
[ link to this | view in chronology ]
- BTR1701, 13 Aug 2008 @ 8:26am
  
  Re: yeah, the other hand.
  > It's probably illegal to pass out ads for
  > a Dutch marijuana sale whether or not they
  > ship to the US. Don't mix up your feelings
  > of gambling legality with that of promoting
  > something illegal.
  
  Then why is my TV full of ads for Las Vegas, complete with images of people cheerfully playing craps and roulette and poker? Gambling is illegal in Virginia, so it would seem that the city of Las Vegas would be just as guilty as these defendants. I wonder why they're not on trial?
  [ link to this | view in chronology ]
Different Crooks, 12 Aug 2008 @ 11:05am

Same Shit
Just remember.. Don't steal.. Your government hates competition!

When do we start to burn this shit down?
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2008 @ 11:09am

Can they also then apply this to politcal ads?
Maybe they need use false advertising claims against all the politicians and go after thier ad companies too...

And just because...
"I think so Brain, but if we give peas a chance... won't the lima beans get jealious?" - Pinky
[ link to this | view in chronology ]
TW Burger, 12 Aug 2008 @ 11:13am

Abuse of Power
This reminds me of the 1930's purges of the Stalinist Soviet Union. Anyone who even remotely seemed to be anti-communist was executed or sent to a gulag using a system of warped laws. The only difference is that Communism is replaced by American Christian Morality, one ideological hypocrisy for another.

This definitely appears to be a rampant abuse of power - coercing laws to fit dogma and doctrine rather than effectively applying the law and amending it to make the advertisement of all gambling illegal. This will not happen since it is not the will of the people (well, powerful corporations with investments in Las Vegas and Atlantic City) or governments addicted to huge state lottery profits.

Clearly this appears to be a turf war where the US federal government is attacking the most vulnerable fringe elements as a reprisal for not cutting them in on the profits, There has never been an instance in the US where a government shut down a gambling operations that they ran themselves or got a huge part of the profits.
[ link to this | view in chronology ]
- TW Burger, 12 Aug 2008 @ 11:25am
  
  Follow up on what is illegal here is not there
  Post Script:
  
  If gambling is illegal in most states why is legal to advertise a casino in Atlantic City, New Jersey in New York state? Why does it matter that the casino is online or physical if the activity being promoted is illegal in the jurisdiction the ad is placed?
  
  Logically all tourism agencies and most advertising firm employees would need to be charged in every city in the U.S.
  [ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2008 @ 11:27am

USA USA USA
BetOnSports, of course, was completely legal outside the US...

Wrong. US law apples worldwide. Anyone who thinks otherwise is welcome to be fitted for their very own Saddam necktie.
[ link to this | view in chronology ]
Sierra Night Tide, 12 Aug 2008 @ 1:05pm

they pled guilty
Assholes! They should have fought it and instead decided to BUY their way out.
[ link to this | view in chronology ]
Brian Cullingworth, 12 Aug 2008 @ 11:41pm

Online gambling
The plea bargaining system in sensible hands is a valuable aid to enforcement and prosecution, but it has the disadvantage of ruling out a proper test of the charges against an accused in a court of law before an independent and qualified judge. And so the confusing situation of Internet gambling in US state vs. federal law continues, along with the notorious legislative "carve-outs" for horseracing, fantasy sports and state lotteries that have so damaged US interests and reputation in bodies like the WTO. Going back before the Unlawful Internet Gambling Enforcement Act 2006, which forbids financial transactions with online gambling companies and expects the financial industry to enforce a badly constructed law, the Department of Justice launched another exercise against the media. The Department sent letters to editors threatening that carrying online gambling advertising may be a ciminal offence. Cautious media owners for the most part buckled under this sort of pressure, creating costly disruption and once again allowing the authorities to get away with an initiative not fully tested in the courts. What is needed is a sensible and bi-partisan review of all the federal laws and exemptions and a redrafting to clear and defined standards, leaving individual states with the prerogative to pass intra-state and by agreement inter-state laws on gambling. Shelley Berkely's attempt to launch an independent study of the whole subject could make a useful start imo. Given the popularity and state or federal acceptance of almost every form of gambling known to man in the United States, the denial of properly licensed, regulated and taxed Internet gambling smacks of protectionism as well as moral hypocrisy.
[ link to this | view in chronology ]
Cat, 13 Aug 2008 @ 6:38am

OMG!
I can't believe this! Just because you created the ad doesn't mean you support the site! You do it because the people offered the ad agency a crap-load of money to do the ad! This is very scary, considering I'm a Graphic Designer!

What's wrong with the government to go so far as to attack the people making the promotional advertisements? The ads aren't illegal, the gambling is!
[ link to this | view in chronology ]
Anonymous Coward, 13 Aug 2008 @ 8:07am

Bush Administration abuses have ceased to amaze me
Come on people, this is the administration that arranged for a male prostitute to pose as a white house reporter so he could throw softball questions for a President to cowardly to actually answer to the press. The abuses of executive power here are already legendary and the real hot stuff is still all covered by executive privilege. If anyone finds this small incident outrageous, I suggest you prepare yourself for what you will be finding out about over the next 4 or 5 years.
[ link to this | view in chronology ]
Ex BoS Employee, 7 Sep 2008 @ 6:23pm

Betonsports
Take it from someone who was there... The company was now legitimate and listed on the london stock exchange. The new management were transforming the company into a reputable solid legitimate international company.

The only real lasting result of this mess was that I, as well as 2000 Costa Rican people were out of a job. And we have yet to get any severance.

Now that I am back in the US I find it odd that I can go to a bar and play lotto, or go to a casino and bet, and for these same things we all lost our jobs.
[ link to this | view in chronology ]
Evie, 7 Feb 2009 @ 5:51pm

A new administration ... ?
With a new administration, do you feel this has a possibility to change?

Thank You,
Evie
[ link to this | view in chronology ]