Microsoft, Yahoo, and Google settle gambling ads charges with DOJ
The three largest Internet advertising firms will pay a total of $31 million to the US Government, settling allegations by the Justice Dept. that they provided advertising services for online gambling sites.
In the terms of their settlement released today, Microsoft has agreed to forfeit $4.5 million, and Yahoo and Google will each pay $3 million.
As an additional aspect of the settlement, Microsoft and Yahoo are investing a combined $13.5 million into the creation of a three-year public service ad campaign warning children of the dangers of online gambling. Microsoft is contributing a further 7.5 million to the International Center for Missing and Exploited children.
None of the three companies have actually admitted or contested their complicity, but have agreed to stop advertising gambling sites. Both Yahoo and Google had already stopped running ads in 2004.
US Attorney Catherine Hanaway, the IRS and the FBI had been investigating the "big three" since 2000 for dealing with what they characterize as illegal gambling sites.
Though the Federal Wire Act goes back even further, the current American ban on online gambling transactions dates back to 1999, when the Internet Gambling Prohibition Act was defeated, thanks in part to the dealings of infamous lobbyist Jack Abramoff. A subsequent bill called the "Unlawful Internet Gambling Enforcement Act," on the way to its defeat, instead found itself attached to the SAFE Ports Act, and thus becoming law anyway in 2006.
"We're going to protect our ports. We're going to defend this homeland, and we're going to win this war on terror," Bush said upon passage of the bill. There was no mention of the wholly unrelated ban on financial transactions between Internet gambling operations and banks.
It effectively renders online gambling impossible despite the fact that it's technically not illegal.
The text of the law says it is illegal for an institution to "exchange funds in connection with the participation of another person in unlawful internet gambling." Significant loopholes, however, do exist: online betting on horse racing, fantasy sports, and state lotteries, is often allowed by way of "grandfather clauses" in state laws.