Major Gambling Advertising Sites Settle with USA

December 20, 2007

Gambling is once again on the forefront, as Yahoo!, Microsoft Corporation and Google, Inc. have settled with the United States against federal claims they accepted advertisements regarding illegal online gambling.

If the allegations were to be tried in court, the three internet giants would have faced prosecution under the Federal Wire Wager Act; prohibiting the use of wire transmissions relating to online gambling. The act is only applicable to casinos and sports books and not against players.

$31.5 Million dollars is the total amount of the settlement; with Microsoft paying $21 Million ($4.5 Million payable to the US, $7.5 contributed to the International Center for Missing and Exploited Children (ICMEC) and $9 Million to be contributed for a three year online campaign for advertisements on gambling awareness for college level students and younger), Yahoo! paying $7.5 Million ($3 Million to the US and $4.5 million for online advertising for youth online gambling awareness) and, Google paying $3 Million to the US.

Catherine Hanaway, US Attorney of the Easter District of Missouri made the announcement December 19th. Hanaway and her office, with the assistance of the IRS and the FBI have been investigating the allegations since the year 2000, Microsoft, Yahoo! and Google stated they discontinued the gambling advertisements a few years back. Settlement discussions had been in the process for the past twelve to eighteen months.

Hanaway commented, "I do think it will have a major impact. Obviously these are the three largest online organizations in the world." Attorney Hanaway mentioned that this coup from these online entities has added to the $40 Million recouped from online gambling operators for back taxes and forfeitures.

The US Attorney also had this to say, "I do think the prosecution from this office has had a chilling effect on online gambling." Microsoft, Yahoo! and Google deny any wrongdoing in the alleged activities they settled on.