Advertising Online Gaming In North America

One of the more frequently asked questions regards the legality of promoting online gaming in the North American marketplace.  Recently, a bill that proposes to ban advertising by "unauthorized "Internet gambling Web sites in the Canadian province of Ontario received its second reading in the Ontario Legislature T. It was approved by a voice vote and will go to a standing committee on justice policy for review.

The specific text of Bill 152 that refers to recent proposed prohibition of online gambling advertising in the province of Ontario, Canada. 

Bill 152 2006

An Act to modernize various Acts administered by or affecting the Ministry of Government Services (Ontario, Canada)

Consumer Protection Act, 2002

8. (1) Section 1 of the Consumer Protection Act, 2002 is amended by adding the following definitions:

"internet" means the decentralized global network connecting networks of computers and similar devices to each other for the electronic exchange of information using standardized communication protocols; ("Internet")

"internet gaming business" means a supplier that accepts or offers to accept wagers or bets over the internet,

(a) as part of the playing of or participation in any game of chance or mixed chance and skill that is to take place inside or outside of Canada, or

(b) on any contingency or on any event that may or is to take place inside or outside of Canada, including, without restricting the generality of the foregoing, a casino game, card game, horse race, fight, match, sporting event or contest; ("entreprise de jeu en ligne") (2) Part II of the Act is amended by adding the following section:

Prohibitions

Advertisements

13.1 (1) No person shall advertise an internet site that operates an internet gaming business contrary to the Criminal Code (Canada).

Sponsorships

(2) No person shall enter into a sponsorship relationship with an internet gaming business that is operated contrary to the Criminal Code (Canada).

Facilitating

(3) No person, other than an internet service provider, shall arrange for or otherwise facilitate the activities prohibited under subsections (1) and (2) on behalf of another person.

Definition, "advertising"

(4) In subsection (1),

"advertise" includes,

(a) the promotion by print, publication, broadcast, telecommunication or distribution by any means, of information intended to promote the use of an internet gaming business,

(b) self-promotion and a contract under which one person obtains the services of another to develop or distribute the advertisement,

(c) a link in a website intended to promote the use of an internet gaming business.

(3) The definition of "internet" in subsection 20 (1) of the Act is repealed.

http://www.ontla.on.ca/documents/Bills/38_Parliament/session2/b152_e.htm

The U.S. Department of Justice in January announced it had accepted a settlement from the Sporting News, which it had accused of promoting Internet gambling by publishing advertisements for online gambling sites.  Under the settlement, the Sporting News had to pay a fine of $4.2 million and complete a 3-year public service campaign, valued at $3 million, to educate people about illegal Internet and telephone betting.   For its part, the Sporting News neither admitted nor denied legal liability in making the settlement. Rather, it said the amount reflected profits it had received from running Internet gambling ads from the spring of 2000 through the end of 2003.

The settlement is the latest in the ongoing campaign led by the DOJ, which two years ago decided publishers and broadcasters are guilty of promoting and profiting from Internet gambling by running ads for it.

In the summer of 2003, the Justice Department sent letters to U.S. media companies warning them they might be prosecuted for running ads by online casinos, because they would be "aiding and abetting" an illegal pursuit. Federal prosecutors also began a grand jury investigation into companies doing business with online casinos. The Justice Department has not commented on its grand jury investigation, and a spokesman for the department said he would not discuss issues surrounding advertising by Internet casinos.

The government's actions had a dramatic effect on the advertising of Internet gaming companies, at least at first. In late 2003, large media firms such as Discovery Communications Inc.'s Discovery Networks, Viacom Inc.'s Infinity Broadcasting Corp. and Clear Channel Communications Inc. stopped accepting the ads. But an even bigger blow to online casinos came in April 2004, when Yahoo Inc. and Google Inc. stopped accepting ads, including the sponsored search listings that casinos relied on for a big chunk of their traffic.

Some legal experts, however, question the Justice Department's contention that media companies might be violating the law when they run ads from online gaming concerns. The legality of online gambling has been a matter of some debate. The government argues that the 1961 Federal Wire Act, which outlawed sports betting over state and international lines, makes all Internet casinos illegal. But several federal courts have said that law is limited to sports betting.

Some legal experts questioned the government’s reasoning in going after media companies, which might be entitled to First Amendment protections that allow them to broadcast or print advertisements for companies that are operating legally in their own jurisdictions, which include the Caribbean and other venues.

But that hasn't changed how IGaming companies and advertisers have operated.

There are IGaming Ads everywhere now.  In our hometown of Los Angeles, there is a huge billboard promoting SportsBook.com on the main road into the LA Airport (LAX)