Casino City Sues US DOJ for Right to Advertise Online Gaming

[VPJunkie]

I felt this should be out here for all webmasters passing through to see.

http://online.casinocity.com/firstamendment/

"BATON ROUGE, Lousiana, August 9, 2004 - Casino City, Inc. today filed a complaint against the U.S. Department of Justice in the U.S. District Court for the Middle District of Louisiana. The complaint seeks a declaratory judgment that advertising online casinos and sportsbooks is constitutionally protected commercial free speech under the First Amendment of the United States.
In June of 2003 the Department of Justice sent letters to a variety of organizations including the National Association of Broadcasters, the Magazine Publishers of America, the Independent Press Association, and the National Newspaper Association. The letters requested that the organizations warn their members that individuals accepting such advertisements might face prosecution.

Several months later the Justice Department issued subpoenas to a variety of media outlets, Internet portals, public relations firms, and other companies seeking detailed information on the purchase and placement of online casino and sportsbook advertisements.

The actions of the Department of Justice have been widely reported in the news and have had a chilling effect upon free speech. Popular Internet portals including Google and Yahoo have recently ceased accepting advertising for online casinos and sportsbooks. Many individuals in the online gambling industry view the actions of the DOJ as a form of blackmail based on the belief of a few government officials rather than established legal principles.

There have been factions within the government that have tried unsuccessfully to explicitly outlaw online gaming by citizens for years. In early 2000, Michael Corfman, President and CEO of Casino City, wrote to his congressman, Barney Frank to ask his opinion of prohibiting online gaming. Barney Frank responded "…I would have hoped that the American experience with alcohol in the '20s and '30s would have made my colleagues far more skeptical of new forms of prohibition than they have been. I agree with you that this legislation violates the principle of leaving the Internet unregulated, and violates as well the privacy of millions of Americans. While I do not myself gamble, I think it is a choice that adults should be able to make for themselves, and I do not support restrictions of this sort, especially when it involves a very intrusive form of regulation of the Internet…"

Casino City's parent corporation has been involved in the gaming industry for years. It created the original gaming portal site, CasinoCity.com in 1995. Today the Casino City website is operated by Casino City, Inc., and is now the most popular such site on the web covering online casinos and sportsbooks, land-based casinos, gaming strategy, and news. It is part of a network of websites including Online.CasinoCity.com devoted to online gaming, and www.CasinoCityTimes.com covering gaming news and offering visitors thousands of articles on gaming strategy.

When the Casino City website was first launched, there were no online casinos, and online advertising was virtually nonexistent. Today, however, I-gaming advertisements form an important part of Casino City's revenue. Company CEO, Michael Corfman, says "The public has the right to see the wealth of information we provide on casinos and sportsbooks, and we have the First Amendment right to advertise online gaming on the web to support its free publication."

The actions of the department of Justice have definitely had an impact on Casino City notes Corfman. "Our parent corporation had partnership plans with A&E Television Networks to promote the Breaking Vegas documentary and associated sweepstakes. Casino City was to be featured on The History Channel website and in 30 national television spots, but they cancelled the agreement after the promotion had already begun. We were told by their marketing agents that A&E felt there was an unacceptable risk the network would be viewed as aiding and abetting online gaming since it's only two clicks from our home page to an online gaming site. When you have an FCC license that must be protected to stay in business, you just can't afford to take chances with the Department of Justice…More recently, a major Las Vegas casino wanted to work with our parent corporation on a promotion but their lawyers nixed the arrangement because of our involvement with online gaming."

Casino City believes the actions taken by the Department of Justice are wrong, and that they threaten our freedom of speech in violation of the First Amendment of the United States Constitution. We also believe that matters of law such as this are properly decided by the courts, and not by government administrators interpreting laws in a way that many experts claim is flawed. Consequently, we have today asked the courts to determine our rights, and those of others similarly situated, under the United States Constitution."

The followup news articles are being posted here - online.casinocity.com/firstamendment/news/ - but I'll copy some of them here for readers.

[VPJunkie]

In the New York Times - http://www.nytimes.com/2004/08/23/te.../23gamble.html

"Lawsuit Claims Free Speech for Online Casino Ads
By MATT RICHTEL
Published: August 23, 2004

An Internet company that publishes information about online gambling has asked a federal district court in Louisiana to decide whether advertisements for Internet casinos are protected forms of speech.

The lawsuit, filed on Aug. 9 by Casino City Inc., which operates CasinoCity.com, an online casino directory, charges that the Justice Department violated the Constitution by threatening American publishers with criminal penalties if they broadcast, print or display advertisements for gambling Web sites. The company is asking the court to issue a declaratory judgment that advertisements for online casinos are constitutionally protected speech.

The suit is the first brought against the federal government, which has been engaged in an aggressive effort to crack down on online gambling. Prosecutors last year started a grand jury investigation into the efforts of American media companies, including major Web search engines, that publish or broadcast advertisements for offshore casinos. The Justice Department has argued that American media companies, by carrying the ads, are aiding offshore casinos. According to prosecutors, the gambling operations are illegal, and so are the advertisements.

But some legal experts have questioned that position, in part because they say it is not clear that federal law prohibits all forms of online gambling. And some argue that even if the courts deem online gambling illegal, advertising for the casinos may nonetheless enjoy constitutional protections as commercial speech.

Barry Richard, a lawyer for Casino City, said ads for online casinos deserved the same protection as, for example, an advertisement in a national magazine for a casino in Las Vegas. Such a magazine, Mr. Richard said, would not be held criminally liable if it were distributed and read in California, even though the Las Vegas casinos are not licensed there.

By analogy, Mr. Richard said, because Internet gambling is permitted overseas, the advertisements should not be illegal in this country. Moreover, some states, including New York, do not make it a crime to place a bet over the Internet.

In the case of Casino City, which is based in Baton Rouge, La., the company derives advertising revenue from offshore casinos whose operations are legal and licensed overseas, according to the court filing.

The government "is not permitted, just because it has some policy against conduct, to keep people from knowing that the conduct is legal elsewhere," said Mr. Richard, who represented President Bush before the Florida Supreme Court during the 2000 election dispute.

Michael Kulstad, a spokesman for the Justice Department, said the agency would not comment on the lawsuit.

To date, the government has made no public statements about its grand jury investigation into online casino advertisers. But the investigation has already had an effect. Several major broadcasters, including the radio giants Clear Channel Communications and Infinity Broadcasting, and Discovery Networks of cable television ceased carrying ads for offshore casinos. The major Internet portals Yahoo and Google stopped accepting ads for the casinos in April.

Lawrence G. Walters, a lawyer who represents offshore casinos and their American partners, said the industry had been waiting for a test case and was eager to see how the Casino City case turned out. He said the stakes were significant, particularly for the offshore casinos, which do about half their business with American consumers.

Mr. Walters said that if the casinos could not advertise in the United States, their visibility and business would drop off significantly. But he said it was too soon to tell how much damage the federal investigation had done to the casinos.

The suit by Casino City comes on the heels of a lawsuit filed on Aug. 3 against several major Internet portals, including Yahoo, Google, AltaVista and Ask Jeeves, charging that they conspired to commit illegal acts by publishing advertising on behalf of the casinos. The lawsuit was brought by two California residents, including one man who lost $100,000 gambling on the Internet, according to the court filing.

A spokeswoman for Yahoo, Mary Osako, said the company would not comment on the suit."

[VPJunkie]

From Casino City Gaming News today - www.casinocitytimes.com/news/article/attorney-general-john-ashcroft-summoned-to-answer-online-gambling-free-speech-complaint-144950

"Attorney General John Ashcroft Summoned to Answer Online Gambling Free Speech Complaint
26 August 2004

Casino City, Inc. reported today that Attorney General John Ashcroft and U.S. Attorney David Dugas have been summoned by the U.S. District Court for the Middle District of Louisiana. Earlier this month Casino City filed a complaint against the United States Department of Justice seeking a declaratory judgment that advertising online casinos and sportsbooks is constitutionally protected commercial free speech under the First Amendment of the United States.

Over the past year the Justice Department sent threatening letters to the National Association of Broadcasters and other organizations and issued subpoenas to a variety of media outlets. These actions have been widely reported and have had a chilling effect upon free speech. Popular Internet portals including Google and Yahoo have ceased accepting advertising for online casinos and sportsbooks. Many individuals view the actions of the DOJ as a form of blackmail based on the belief of a few government officials rather than established legal principles.

Under the terms of the summons, the Department of Justice must answer the complaint within 30 days. The complaint argues the application of laws cited by the DOJ in its threatening letters is unconstitutional and that intimidation through threats of their application violates the First Amendment right to free speech. Casino City and the DOJ must file a status report by December 2nd, and a scheduling conference is set for December 16th.

The government could concede advertising online gaming sites is legal. Casino City's attorney Barry Richard says "… it's possible and hopeful, so far as my client is concerned, that the Department of Justice will say 'We didn't mean to threaten organizations that are engaged in the type of advertising that your client is,' and that would be fine with us. It would clear the air for those people who have been and would like to continue to do this." "

[casinoglen]

Thank you for posting these Cindy!

[VPJunkie]

I took my cue from CPA at Sucks. I'll keep it updated as it goes along.

[GamblersClick]

About time that they get in their face. This shouldn't be illegal.

[matted]

Well, last I heard the case was dismissed, pending appeal by Casino City. That was in February - no updates since.

[MichaelCorfman]

Well, our action had been dismissed by the Louisiana district court since they were persuaded by the Justice Department's arguments that they were not likely to bring legal action against us. However, suits like the one we brought do not have that as a prerequisite. The prerequisite is that the actions of the DOJ have suppressed free speech and that the DOJ has not disavowed its right to bring action against us.

On June 13th we filled our appeal action against the DOJ. This is the court that actually matters, and we expect they will agree that we have a case or controvery that deserves to be heard by the courts. A copy of the brief we just filed against the DOJ is available on the legal documents page of our first amendment case website. If you would like to see it, just visit the first amendment case website at: [url="href="https://online.casinocity.com/firstamendment/"Online.CasinoCity.com/FirstAmendment/</a>

[universal4]

Thank you very much for keeping us updated on this Michael.

I hope you are able to once again come spend a small amount of your valuable time with us this year in Vegas...in fact maybe you can stay a litlle longer and even have a drink with us too....

Rick
Universal4

[MichaelCorfman]

Just thought I would let everyone know that our first amendment case for the right to advertise online gambling continues to move forward.

This past week, on Wednesday, December 7, 2005, we were able to argue in front of the 5th circuit court why we believed we had such a right. Barry Richard, our lead litigator, argued our case for about 15 minutes. The attorney for the Department of Justice argued against us for 5-10 minutes. We then gave 5 minutes of reputtal arguments.

Now we just wait for the ruling.

Anyone interested in more details about the case can visit our website at http://online.casinocity.com/firstamendment/.

Michael Corfman

[Doolally]

Thanks for the update Michael and good luck.

[chalkoutline]

Excellent work Michael, keep us posted on the outcome. Good luck with it!

[VPJunkie]

Just thought I would let everyone know that our first amendment case for the right to advertise online gambling continues to move forward.

This past week, on Wednesday, December 7, 2005, we were able to argue in front of the 5th circuit court why we believed we had such a right. Barry Richard, our lead litigator, argued our case for about 15 minutes. The attorney for the Department of Justice argued against us for 5-10 minutes. We then gave 5 minutes of reputtal arguments.

Now we just wait for the ruling.

Anyone interested in more details about the case can visit our website at http://online.casinocity.com/firstamendment/.

Michael Corfman

Wow - where's Court TV when you want it? Wish I could've seen that.

[Webzcas]

Good Luck Michael!

[igami]

I just discovered this news this morning on IGN ... xhttp://www.igamingnews.com/login.cfm?aid=6401

Casino City Drops First Amendment Case Against DOJ

The United States Court of Appeals for the Fifth Circuit has this week accepted Casino City's motion to dismiss its declaratory judgment case against the U.S. Department of Justice.

[matted]

Can someone check this article and paraphrase? I dont have access to view the article and I cant find a reference online yet. I have a hard time believing Michael would drop the suit unless there was some major intimidation going on.

[igami]

I too was a bit surprised, but fully understand his point of view - as the article had insinuated it anyway. This case was a significant undertaking and we are all to some extent indebted to Michael for having the gumption to pursue it as vigorously as he did.

Thanks Michael - I'm sure the concession’s you and your legal team achieved will turn out to be of great significance.

A brief can be found > here <

[chill]

long period of silence coming from the Justice Department with regard to online gambling advertisements

Didn't someone just receive a huge fine for exactly that

[WebMeisterQ]

I'm surprised the affiliates w/ deep pockets are not presenting more cases like this against the DOJ. To achieve online success in the US it appears you need to fight for your rights to make money now. Thank God Canada isn't run by a dictator...."yet".

[Ziggy]

Nice work and dedicated effort, Michael.

Thanks!