A very familiar name, among those named in a class-action California lawsuit accusing major Websites of selling ads for illegal online gambling in the Golden State, is one only too familiar with litigation: Sex.com.
The adult portal is accused of using paid Web ads for Casino Tropex, Showdown online casino, and Lucky Nuggett Casino, when Internet gambling ads are against California law. This puts Sex.com into some rather illustrious cybercompany: their co-defendants in the class action suit include Yahoo, Google, Overture, Ask Jeeves, LookSmart, AltaVista, Lycos, JupiterMedia, CNET, FindWhat, Kanoodle.com, Business.com, and Does 1-100.
"Thank God it doesn't scare me. I relish it," said Sex.com mastermind Gary Kremen to AVNOnline.com about the litigation. "The good news is that they didn't even name us correctly, so technically we don't even know if they're referring to us. You've got to name people by their right names."
Sex.com is held by a parent called Grant Media, but the court filing for the class action lawsuit listed the company as "Sex.com, Inc. (Sex.com)"
"Internet gambling is a growing business," said the lawsuit filing earlier this week. "Since the mid-1990s, Internet gambling operators have established approximately 1,800 gambling Website locations with revenue in 2003 estimated to be $5.0 billion.... The Websites at issue in this complaint are leading Internet gambling Websites which have been in operation for many years and are large operations involving numerous employees, agents, and owners, which make millions of dollars annually conducting illegal gambling in California....
"Despite the illegal nature of unlicensed Internet gambling in California, and the United States in general, each of the defendants actively and knowingly advertise and facilitate illegal Internet gambling by advertising illegal Internet gambling businesses," the suit continued. "Each of the defendants actively and knowingly accepts payment to produce advertisements and paid links for Websites of unlicensed Internet gambling businesses. This advertising revenue is determined by the search term input by the user. Hence, defendants expressly sell rights to advertise based on such search terms as 'illegal gambling,' 'Internet gambling,' and 'California gambling.' Further, each of the defendants either expressly uses, or has access to, geo-tracking software which permits defendants to be able to target illegal gambling advertisements to particular locations such as California."
The plaintiffs are looking for a rather broad payoff themselves: they want Sex.com and its fellow defendants not only to stop accepting Internet gambling ads, they want them all to give up "all revenues and profits" from the ads into a fund from which would be drawn restitution to licensed California gambling businesses and "to the spouses of gamblers who have had community property improperly taken from them as a result of illegal gambling," not to mention restitution to the state for unpaid licensing fees and gambling taxes.
Kremen – who spent several years in court fighting to recover his domain after Stephen Cohen hijacked it – thinks his portal is not guilty of any wrongdoing in this instance, saying that accepting Internet gambling ads is "clearly First Amendment-protected activity, and this is a great concern to the adult community – because a fair amount of adult Webmasters take gambling ads and/or own online casinos."
He said he doesn't believe the California law in question was ever adjudicated fully, and that this class action suit may yet be deemed a frivolous lawsuit, charging that one of the plaintiffs in the class lost money gambling through an offshore online casino "and has unclean hands." He likened suing Websites who accept ads for online casinos to suing American Airlines for taking you to Las Vegas that time you lost a pile of money in the hotel casinos.
"This is clearly a malicious prosecution," Kremen said. "And we'll be looking into that very carefully... Suing someone for their First Amendment contacts is clearly never what [the California law] was engaged to be." California law also levies penalties in the event a lawsuit is declared frivolous.
