A U.S. Supreme Court decision handed down in 1999 could support media rights to advertise Internet gambling services in the United States.
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"It is now apparent that the Eastern District of Missouri is not a cowboy jurisdiction with a rogue agenda, but the point man for the Department of Justices' Internet gambling policy as a whole
- Martin Owens
Attorney at Law
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Martin Owens, a California-based attorney who represents several gaming clients, said recent actions by the U.S. District Court and the Department of Justice ignore the law and the U.S. Supreme Court and amount to nothing more than a witch hunt by a conservative administration.
Last week it was confirmed that at least one portal site has been subpoenaed by a grand jury in the U.S. District Court in the Eastern District of Missouri in relation to its accepting of advertising from online casinos and sports books.
Owens said the investigation is a perfect example of a justice department that has the authority to launch investigations and gather information without any checks and balances.
"It is now apparent that the Eastern District of Missouri is not a cowboy jurisdiction with a rogue agenda, but the point man for the Department of Justices' Internet gambling policy as a whole," he said.
Attorney General John Ashcroft cut his teeth as a Missouri Congressmen before being named to the post. Although Ashcroft has never made any public statements specific to online gambling he is an active leader among right-wing conservatives. He prides himself on moral agendas and has connections in Missouri.
The biggest shock for Owens is what he says is the federal government's blatant disregard for existing case law regarding the issue of advertising rights for casino operators.
In Greater New Orleans Broadcasting Association Inc., vs. United States, the Supreme Court reversed a lower court ruling that prevented casino operators in New Orleans from advertising their casinos on Texas radio stations.
The court ruled that the advertisements were protected under the First Amendment of the Constitution. Owens said the basis of the ruling could be extended to online gaming. Casino gambling is legal in Louisiana and illegal in Texas, but the court ruled that Texas couldn't prevent a licensed and legal operator in Louisiana from advertising in Texas.
"So, if online gambling is legal in Costa Rica, or even in California through its advanced deposit wagering system, the government can't stop anyone from carrying advertising for the service," he said.
At the heart of the argument is the Department of Justices' belief that online gambling is illegal and others, like Owens, who argue that nowhere has the federal government passed a bill making online gambling illegal.
He cited a letter to the National Association of Broadcasters from DOJ officials that said that Internet gambling is illegal in the United States and that carrying advertisements could make broadcasters felons under U.S. law.
The DOJ would have a case against the industry if online gambling was made illegal. In the New Orleans case, the court refers to a standard set out in Central Hudson Gas and Elec. Corp. v. Public Service Commission of New York in 1980 to determine whether commercial speech is protected by the First Amendment.
For commercial speech to be protected, it must first and foremost "concern lawful activity and not be misleading."
As much as it would like to, Owens said, the DOJ can't arbitrarily decide what is and isn't "lawful activity" when Congress has failed to pass any prohibitive legislation.
In fact, current bills before Congress only prohibit the use of "instruments of banking," like credit cards, debit cards and wire transfers, for funding online gambling transactions. Even if the bill is passed, it wouldn't prevent the industry from advertising in the United States.
Owens said he's unsure how those subpoenaed by the grand jury will respond, but oftentimes they're required by law to turn over any documents asked for.
The grand jury and the U.S. district attorney might get the information they're seeking, but Owens feels if the time ever comes for the argument to go before a judge, the DOJ will have very little ground to stand on.
Click here to view a copy of the New Orleans decision.