An unidentified Internet gambling portal was subpoenaed to appear in federal court and surrender nearly all records – including whether it discussed the legality of advertising from online casinos or gaming sites – in a move that could signal the beginning of a widespread investigation, according to Interactive Gaming News.
The trade publication said November 17 that the portal was ordered to testify October 29 to a grand jury in the Eastern District of Missouri, and asked the portal's operator to turn over all commercial and financial information from January 1, 1997 to the present time that covers advertising online casinos and sports books. "Rumors that the court had served a number of portal operators and other media outlets (some of them major) swirled for several days before the aforementioned subpoena was obtained," the publication said.
It didn't mention which outlets or operators had been subpoenaed.
The subpoena in question also called for information about ads placed on television, radio, and cable television, not to mention accounting records, records of sales calls, other telephone records, contracts, invoices, records of payment negotiations, e-mail incoming and outgoing, financial transactions, annual gross sales revenues, advertising revenues and how it was received, and the names of any financial institutions and account numbers related to the portal, IGN said.
And the court also wanted the portal to turn over any correspondence in which its operators might have discussed the legality of accepting ads from Internet casinos or gambling books, including possible letters from the Department of Justice to "a handful of trade organizations advising them not to accept advertising from such business since it could be in violation of federal law," IGN added.
Such a letter was sent to the National Association of Broadcasters, from deputy assistant attorney general John G. Malcolm, describing ads for online gambling as "ubiquitous on the Internet, in print ads, and over the radio and television. The sheer volume of advertisements for offshore sports books and online casinos is trobling because it misleads the public in the United States that such gambling is legal, when in fact, it is not.
"Because of the possibility that some of your organization's members may be accepting money to place such advertisements," the June 11, 2003 letter continued, "the Department of Justice, as a public service, would like you to be aware that the entities and individuals placing these advertisements may be violating various state and federal laws and that entities and individuals that accept and run such advertisements may be aiding and abetting these illegal activities."
The letter said state and federal laws prohibit online gaming and sports books in the U.S. "with very few exceptions limited to licensed sportsbook operations in Nevada." Malcolm concluded the letter with a warning that broadcast and other media should know the illegality of such gambling sites and operations "since, presumably, (these media) would not run advertisements for illegal narcotics sales, prostitution, child pornography, or other prohibited activities."
But the Justice Department may be going up against a formidable adversary. In 1999, the Supreme Court ruled in a New Orleans case that casino operators from New Orleans were allowed to advertise on Texas radio stations, and California attorney Martin Owens said that ruling could be applied to the subpoena described earlier – because the high court said Texas couldn't stop a New Orleans site from advertising in the Lone Star State.
"It is now apparent," said Owens, "that the Eastern District of Missouri is not a cowboy jurisdiction with a rogue agenda, but the point man for the Department of Justice's Internet gambling policy as a whole."
