The U.S. Department of Justice was successful yesterday in getting Casino City's case dismissed by the U.S. District Court for the Middle District of Louisiana. The case is one that many in the I-gaming industry hoped would re-establish advertising for Internet gaming services in the American market.
Casino City in August filed a motion for declaratory judgment regarding its right to carry advertising for Internet gambling services. Proponents of the right to advertise for offshore gambling operations were hoping that the court would return a verdict stating that the DOJ's application of aiding and abetting charges to advertisers violates the First Amendment of the U.S. Constitution. The court instead found that "Casino City has failed to establish an actual case or controversy because it is clear it does not have standing to file this suit under the facts of this case."
The court has come to the conclusion that Casino City has failed to demonstrate that it faces a "realistic danger of sustaining direct injury." First, "Casino City has failed to allege its intended activities constitute those which are prohibited by statute." The court emphasizes the fact that Casino City has argued that its activities are legal "because it does not accept proceeds which come from illegal bets, deposits, or wagers placed by persons located in the U.S."
Because Casino City asserts that it neither engages in illegal activity nor plans to engage in illegal activity, the court has ruled that Casino City faces no legitimate threat of prosecution and therefore lacks standing to bring a case to court.
The court is also unconvinced that Casino City should fear prosecution based on earlier actions of the Department of Justice. In June 2003, the DOJ sent a letter to the National Association of Broadcasters (NAB) warning that companies that advertised for offshore gambling operations could be guilty of aiding and abetting an illegal activity (i.e. offering gambling services to U.S. citizens). The court highlights the fact that Casino City did not receive this letter.
The court also points out that although several subpoenas were issued to advertisers and other I-gaming related companies, Casino City did not receive a subpoena. According to the ruling, "The record simply fails to support a finding that Casino City is in any way subject to threat of investigation or an actual investigation." The ruling also states that the court is not persuaded that Casino City faces an imminent threat of prosecution because over one year has passed since the DOJ sent the letter and subpoenas.
Ironically, the ruling is practically a green light for Casino City to continue doing the advertising that it does, but it does nothing to clarify the ability of larger media advertisers--such as members of the NAB--to advertise for offshore gambling providers.
Casino City believes the court has erred and intends to appeal the ruling. "We have every intention of filing an appeal," Patrick O'Brien, a lawyer for Casino City said. "We think the case was wrongly decided on the law and we expect to win on the appeal."
But even if Casino City gets a reverse decision on issue of standing, it still faces another massive hurdle: The court also declared yesterday that Casino City has no claim for a First Amendment violation.
Casino City has argued that the overseas companies for which it advertises are lawful, but the court points out that it does not allege that it is legal for those companies to accept wagers from United States bettors. The court notes that the Wire Act prohibits the use of the Internet to transmit betting information and states that it is illegal to aid and abet "the commission of any offense against the United States." The first prong of the Central Hudson Test, which is called into play for First Amendment advertising cases, states that there is no right to advertise illegal activity.
Click here to view the ruling of the U.S. District Court for the Middle District of Louisiana.