Warning Gambling and Casino Affiliates

[5StarAffiliates]

I just did a big old long blog about this, but thought I would post the main part of the story here:

I often warn affiliates about promoting PPC: "Pills, Porn and Casinos" - due to current and pending legislation. A question I often get asked is: can affiliates REALLY get in trouble directly for promoting an affiliate program in these dicey spaces? Well the answer is now Yes - if you live in Washington and promote or even just write about and link to any type of gambling. According to yesterday's Seattle Times Story, "writing about online gambling in a way that seems promotional can earn a cease-and-desist order, and potentially, a criminal charge."

The 1st victim in this new Washington law got a cease and desist and was forced to take his site down. Funny thing is this normally liberal state that actively promotes horse racing and the lottery is the 1st to crack down. Also noteworthy is the fact that they are not just after online gamblers or casinos, but any web site that links to them and that includes affiliates.

The hosting company has suspended the "offending" site - but here is a link to <a target="_new" href="http://web.archive.org/web/20041112054526/http://integritycasinoguide.com/">IntegrityCasinoGuide.com</a> from the WayBackMachine. Looks like a standard affiliate site and all the work effort and money that went into building it just went out the window. Don't go there, it's not worth it. These laws could be coming to your state soon.

Here's the story from the Seattle Times:
http://seattletimes.nwsource.com/htm...6_danny15.html

What do you guys think???

[Dan Grossman]

What do you guys think???

What I think is their new law won't hold up if someone takes it to a higher court. Who wants to be that person?

[5StarAffiliates]

Yep I agree Dan, but still...

"all the work effort and money that went into building that site just went out the window"

If you check the wayback machinge that site had been up for years and no idea how much he was earning. But can you imagine having it just YANKED out from under you???

It's similar to what's happening with all the Amazon affiliate sites
getting shut down by their hosts without warning.

http://www.****.com/technology/Amazo...sive_DCMA_Hoax

[Byalik]

He can just register the site offshore or move to a new state right? It might be worth it depending on how much money he is making with it.

[5StarAffiliates]

The article says he's trying to sell it to someone offshore.
Anyone want to buy?

[scotlandforvisit]

why can't he just move the hosting? No doubt what he wants for it would be too much for my means but if he wanted a "partner" and a UK host it would seem easy enough to me.

[Ulchie]

I'm glad I live in a free country. At least it is for now. Though that will sure change when they try and drag us into some sort of North American Union...

[john2k]

This was bound to happen sooner or later. I don't agree with the government having these types of restrictions, but am not surprised at all about this. I would expect other states to soon be following the same path.

Gambling is such a highly regulated industry and there are so many applicable and serious laws that apply, publishers need to be very careful. No doubt, the states also want their piece of the pie as well...

In the USA, as far as I understand, most issues related to gambling have been left up to state legislation. In states where gambling is legal, it is highly regulated and licensed by a state commission. If the gambling operation that is being promoted is not licensed or regulated by the state where you are located, then it is considered illegal by that state. Also, if by chance you promote a gambling operation that is legal within your state - it's important to make sure that if you promote it outside your state that you only do so in other jurisdictions where the specific gambling operation is also legal. You cannot promote an online gambling site from one state (where it is legal) to viewers in another state where the gambling site is illegal.

Just because a gambling operation is licensed or regulated in a country other than the US does not mean it is legal in the US or in any US states. For some reason there are many (US) publishers that believe they are under the jurisdiction of foreign governments and that US/state laws do not apply to them in regards to promoting Internet gambling sites.

Yes, you can make a lot of money promoting online gambling. You can also make a lot of money promoting drugs like cocaine, heroin, etc. I'm sure there are many illegal products or services that can be promoted and sold online. Why are so many US publishers willing to promote gambling and not the latter when both are most likely illegal within their jurisdiction?

That's not the way most of us see it. Gambling is obviously an entirely different animal than drugs. But all that does not really matter right now. What matters is how the government that may or may not prosecute you thinks about it.

This guy in Washington is not the first to have action taken against him regarding his promotion of Internet gambling. He may be the first "small time" player for this to happen to, though. Interesting news. You know what would be big news, though? The first time some webmaster is sent to jail for a few years for doing this, or has pretty much everything he/she earned & more confiscated. And it will probably be some kid who just turned 18/19 and didn't know any better. Not likely that the law will care much about whether or not someone knew any better...

Around 18 months ago I was offered $5-10k monthly to run gambling ads on my sites. Kinda difficult to say no and I wish I could have accepted those ads. In New Jersey, though, the state makes the decision of whether or not to promote Internet gambling an easy one: http://www.nj.gov/lps/ge/internet_gambling/law.htm

For anyone here that is promoting gambling on their sites and making good money from it, don't take what I post here to personally. I'm not criticizing anyone, just posting my reply as to the way I understand things to be. I certainly don't want to be a martyr for the "cause" - there are too many other ways to make good money online.

Here are two threads at SP where we've discussed this issue a bit before: Americans: Advertising Online Gambling Sites Is Illegal & $1500+ with a poker site?

I suppose the one good thing about this issue is that we are in the USA, a country where the people can force changes in the law if that's what is really wanted by the majority. I would certainly appreciate being able to play some Texas Hold'em online instead of needing to go to Atlantic City to win other people's money.

[MtraX]

Does anyone have recommendations on offshore accounts that would work with Verisign? Would a merchant account in Bermuda be fine?

[mjames]

The first time some webmaster is sent to jail for a few years for doing this, or has pretty much everything he/she earned & more confiscated. And it will probably be some kid who just turned 18/19 and didn't know any better. Not likely that the law will care much about whether or not someone knew any better...

I am 20, in college, and run a sports site where I make money selling to sportsbooks and the like. I never saw it as bad or dirty like selling to porn, but articles like this scare me: http://apnews.myway.com//article/200...D8JAGIL00.html

I'm in the U.S. and wondering what I should do. I have many long-term contracts with these sportsbooks and they are 80%+ of my revenue. It's downright SCARY to imagine getting along without them. It's frankly depressing. I know many sites promote these sportsbooks and hope it's not a matter of time before the innocent non-gambling sites are being cracked down on for promoting sportsbooks.

Sportsbooks are illegal and it's morally wrong to promote something illegal, but is it illegal to link to them? Should I not worry unless this bill passes the Senate, not till 2007, if at all?

[john2k]

That's hard to say. I suppose the best any of us can really do is say "maybe." There doesn't seem to be a lot, if any, precedent regarding this. As a publisher you "might" be okay.

A simple link to a site, with no financial benefit for doing so, would probably be less likely to get you into trouble. But if you benefit financially for linking to illegal sites I think it would be considered aiding and abetting.

[tke71709]

Sportsbooks are illegal and it's morally wrong to promote something illegal, but is it illegal to link to them? Should I not worry unless this bill passes the Senate, not till 2007, if at all?

You're not just linking to them, you're being paid to promote their business.

I doubt you could get in trouble for simple linking, but you are actively promoting and earning revenue from these arrangements.

[mjames]

I just looked at my records and over half my revenues this year are from sportsbooks. Here's my question. Don't many of these sportsbooks have US-legal .net versions where no real money is exchanged? Like PartyPoker? Because they still advertise on ESPN and other networks. Maybe I could only accept the .net versions...

I found some interesting links:

http://www.ceb.com/newsletter/advertising.htm

"Casino City had argued that its activities are legal because it does not accept proceeds which come from illegal bets. The court ruled that based on that argument, Casino City faced no legitimate threat of prosecution and therefore lacked standing."

http://www.bettingmarket.com/doj5001.htm
http://www.wired.com/news/politics/1,70660-0.html#csrc1
http://www.lasvegasadvisor.com/onlinegamingarticle.cfm

I'm really concerned. So many of my fellow niche/industry sites make money off sportsbooks, though. It would devastate us all. And I just took on a ton more expenses by moving into my own place. It seems like everything is in doubt now. The site I've built since 1998, all that work, would barely be able to survive and now I might have to get another job. Talk about a downer...

[mjames]

I found this, which really spells it out: http://gamblingads.com/legal.html

Namely applying to me and small publishers, we have little to worry about:

It's only the major media players who have even received a letter from the government telling them to not accept gambling ads, and only one of them has been fined. All of the minor media has been spared so far. Even Casino City, the largest website on the Internet devoted to online gambling, hasn't received a cease and desist notice from the government. But that didn't stop Casino City from pre-emptively fighting back anyway.

Casino City case. In August 2004 Casino City sued the DoJ to establish its right to accept ads for Internet gambling. A judge dismissed the case, saying Casino City didn't have standing because it hadn't received one of the cease & desist letters. Casino City filed an appeal, but before it could be heard, Casino City withdrew from the case in February 2006, apparently because they felt that they'd made their point: If the government ever tells Casino City that it can't accept gambling ads, Casino City will fight. (Online-Casinos.com)

State Law. Even if one doesn't run afoul of the feds, there's a chance that state government will come calling. In June 2006 the state of Washington shut down the gambling portal IntegrityCasinoGuide.com, which like so many other sites just carried reviews of online casinos along with affiliate links. However, it appears that the site offer faced no penalty, other than having his site shut down. (The Online Wire)

The Future. If history is any indicator, websites covering online gaming have little to worry about. In the unlikely event they get a warning letter, they will likely be able to simply stop accepting ads without facing penalties (assuming they don't choose to fight).

This is good news. Especially until/if the bills passes the Senate, small publishers should be okay.

[OnlineGuide]

This is definately going to be interesting. I do not know why the feds need to make this law. Don't they have other more important things to worry about?

[Dan Grossman]

This is definately going to be interesting. I do not know why the feds need to make this law. Don't they have other more important things to worry about?

Like flag burning and gay marriage?? Real problems don't get discussed in Washington in election years.

[WorldwideGaming]

Oh well, this just means more people to promote our products.


Sincerely,
James Warden
Affiliate Manager
Worldwide Gaming, Inc.
Email: james@worldwide-gaming.com
Website: http://cash.worldwide-gaming.com
Phone: 763-253-0230
Fax: 763-253-0232

[Webmaster7]

If the affiliate programs you promote are from companies in european stock exchanges, then you can't compare that to drugs promotion, or something of that sort.

They are legal, not scam operations. It's obvious that everyone wants a piece of the action, and the lobby is strong, so land based casinos in USA want everything for them, but they are still late on the online competition. So it's easier to force US citizens from playing on competitors, keeping all players for them.

The world is more global everyday...

[john2k]

"Casino City had argued that its activities are legal because it does not accept proceeds which come from illegal bets. The court ruled that based on that argument, Casino City faced no legitimate threat of prosecution and therefore lacked standing."

From the article about that which you linked, it seems to me that it was Casino City taking the DoJ to court. They weren't being prosecuted by the DoJ.

In February 2006, the Justice Department was successful in getting the case dismissed.

Believe it or not, some companies do things like this to make high profile news, as part of their promotional strategy. Bad press is better than no press. Considering that Casino City is located in Denmark (listed on their website & whois search), I'm inclined to believe that taking the DoJ to court was just a way for them to get some additional media attention here in the United States. I think it's very unlikely that the DoJ would be interested in a website that is operated by a publisher in Denmark... that is most likely why the their case was dismissed.

[john2k]

I found this, which really spells it out: http://gamblingads.com/legal.html

Namely applying to me and small publishers, we have little to worry about:

This is good news. Especially until/if the bills passes the Senate, small publishers should be okay.

That article seems to be a bit misleading. It starts off mentioning that it will only consider the United States, but mentions Casino City as an example of smaller media. Casino City is located in Denmark from what I can tell. Unless Casino City has U.S. based operations they are not within the jurisdiciton of the DoJ or U.S. courts (aside from legal issues that are covered by treaties between the countries). Casino City is on VERY different grounds in regards to being legal within the U.S. as compared to a publisher that is actually located within the U.S.

That article also mentions that so far the smaller media have been spared, but the first post in this thread is a perfect example to the contrary. The guy's website is still offline and he was supporting his family with income from it. No way to know at this point if there have been other penalties for him, but at the very least I'm sure his website being taken offline is a significant financial loss.

The source of that article also seems to have a financial interest in selling online gambling ads, so you may want to take that into consideration as well. It is in their best interest that publishers continue to use their service for selling gambling ads.

[john2k]

Out of curiosity I did a search on the guy mentioned in the first post, the one who had his site taken offline... I came across this article and it seems that he also owns/publishes The Association for Professional Casino Webmasters. I wonder if he was targetted partly, or even mostly, because he runs that association...(?). Just thought that was interesting...

[aeiouy]

I am not sure why some people think this would not withstand a legal challenge.

Not allowing people to advertise and promote illegal activities is not something new or unique. I think it is very likely the law would be upheld, because promoting something illegal can be prohibited.

Casino City's argument is weak. It would be like me advertising Crack for sale, but since I was not actually selling the crack, but simply getting paid for advertising it, I should be okay.

[aksana]

Now there are a lot of webmasters move their sites to offshore zones and continue work as usual, there are a lot of affiliate programs that continue accept USA playersb as usual.

Our business as usual and we are very glad. And I must say, that I get now more US players as usual.

[SitePointer]

How are webmasters of gambling forums/affiliate sites affected?

[AfroNinja]

I run a single casino text ad on my site for a little bit of money (888.com) but my server is located in canada (hostingplex) so could this afffect me? I shouldn't be in any major trouble, the ad is easily removable if someone says it's a problem...