Texas Raid Could Spell Trouble for Portals and Info Sites

12 July 2000
Links on a Texas-based website to offshore Internet gambling sites have prompted a massive legal battle in Texas. A group of law enforcement officers, under the instruction of the Attorney General, raided MonetizeMedia.com for allegedly promoting Internet gambling illegally, an accusation that leaves company officials confused and angry.

"This gives them (the state) incredible power over what Texans can view on the Internet," explained the company's chief technology officer Don Beavers. "This makes it a risk for any casino to advertise in the U.S. or be viewed in the U.S."

Tuesday, 30 agents from the AG's Financial Crimes division and the Department of Public Safety raided the company's offices as well as the homes of three company officials. Among items seized, according to Beavers, were employees' computers, $35,000 in a payroll account, a company Internet server and numerous documents. Beavers says agents also seized access codes for the company's "Get Free Email" program and he likened the action to stealing the access codes to MSN customers' Hotmail accounts. Plus, records were taken from the company's CPA offices, including tax returns for 400 individuals not connected to the case.

A search warrant for the raid was obtained by the Attorney General's office June 26. Heather Browne, a spokesperson for the Attorney General, said she couldn't divulge why the company was raided because the investigation is still ongoing. Beavers, however, said that authorities followed links on MonetizeMedia's portal to gambling sites where they were able to place bets at sites such as 2BetDSI and Casino-On-Net. The kicker, according to Beavers, is that an agent supposedly bet $200 at Gambling.com, a site that doesn't even accept wagers.

Attorney John Crigler of Garvey, Schubert & Barer says the case could have tremendous First Amendment-related repercussions. "Attorneys general keep looking for ways to go after Internet gaming sites and the ways they keep coming up with (to prosecute these sites) are to go after ancillary services," Crigler explained.

Monetize has a portal site that offers numerous links to sites, including a section for Internet gambling.

Beavers called the situation "devastating." News of the raid has scared off potential advertisers, and the company has been directed to not accept any funds from offshore sources. Lacking computers and money to buy more, the company's 15 employees are unable to work. At least eight employees will consequently be pink slipped Friday. Even notifying stockholders about the raid is a problem, as company officials can't contact stockholders without their computers and records.

Further research reveals that Texas Governor and presidential candidate George W. Bush granted Texas Attorney General John Cornyn $1.5 million last year to form an illegal gambling task force that would focus much of its efforts on Internet gambling. Bush said in a news release issued in August 1999, "This grant will help the Attorney General's office join local efforts to vigorously enforce our state laws against casino-style and online gambling in Texas." Members of the task force reportedly participated in the Monetize raid.

Beavers complained that the task force targeted sites that carry advertising only because it was unable to find any illegal Internet gambling sites based in Texas.

Monetize is trying to fight back and has won a temporary restraining order against the Attorney General's office, which has also been ordered to return computers and money. Browne said the Attorney General was fighting the decision and that the matter could go to court as early as Friday.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at vicky@igamingnews.com.