Casino City Case Dismissed

**CCraze** · 02-16-2005 11:16 PM

Taken from IGaming News - very sad news!

Casino City Case Dismissed

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 have 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. Instead, however, the court has 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 on the first amendment issue: 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

http://www.igamingnews.com/index.cfm

Stephen
CasinoCraze / FastPoker Affiliate Program

**Engineer** · 02-16-2005 11:53 PM

This is disappointing news.

The Court notes that the Wire Act prohibits the use of the Internet to transmit betting information.

Um... what? This is an absolutely stunning statement. The Wire Act, drafted some 40 years ago, makes references to the Internet??

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.

HAH! Well, I guess online gambling is definitively illegal now. This happened when, exactly? Yesterday? Oh I know -- maybe it was declared illegal in the damn Wire Act.

Doesn't all of this contradict the recent FCC ruling?

I really hope Casino City wins the appeal. I can't believe the court actually came to these bizarre conclusions. The level of ignorance involved here is mind boggling.

**yorktown** · 02-17-2005 03:14 AM

The issue here is that the Casino City suit claims the government was using mafia like tactics to prohibit advertising for them. It has nothing to do with Casino City doing anything illegal and/or being investigated. They claim the Justice Department was the one unlawfully abusing its power.

This had to be a political favor being pulled.

A sad day for online gaming today. Kudo's to Corfman and Casino City for standing up and taking a shot.

Marc Lesnick
Conference Organizer
Casino Affiliate Convention
April 7-8, 2005
Amsterdam
http://www.cac2005.com

**Dominique** · 02-17-2005 10:43 AM

I think this is par for the course and it doesn't discourage me at all. Also, we have had a major change that has not been taken into account:

The Court notes that the Wire Act prohibits the use of the Internet to transmit betting information.

This is not true anymore at all.

The FCC has decided that the internet and the telephone are definitely not the same thing.

The wire act forbids using the telephone for transmission of betting information.

The FCC didn't make this decision to solve the gambling issue, it decided this to solve a dispute between the phone companies and internet telefony, so this decision has not made the rounds as it should in the gambling industry.

The FCC is the one authority in the US to be able to make a final decision on this and it has ruled.

The wire act does NOT apply to the internet.

**Professor** · 02-17-2005 11:17 AM

While I always applauded Casino City's courage in filing the suit I expected this to be the outcome.

In todays political enviroment a lawsuit against the justice department is not a wise idea. I only hope the inevitable reprecussions are not excessive.

bb1webs · 02-17-2005 12:02 PM

I only hope the inevitable reprecussions are not excessive.

agreed. I hope we don't start seeing the few places left to us; as shutting down.

wagerprofits · 02-17-2005 04:44 PM

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.

So, in order to be considered, they would have had to admit they were doing something illegal?

**krystall2** · 02-17-2005 05:27 PM

The FCC has decided that the internet and the telephone are definitely not the same thing.

The wire act forbids using the telephone for transmission of betting information.

I believe this would apply to sport betting sites, since most do take bets over the phone.

**Professor** · 02-17-2005 05:54 PM

Krystall2 that was a quote from Dom and its her opinion. It's not the Justice Departments position or their interpetation of the law. Here is what the COURT stated:

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

**Dominique** · 02-17-2005 06:28 PM

STATE CANNOT REGULATE INTERNET CALLS:

ST. PAUL, Minn. - A Minnesota agency may not regulate calls through cyberspace as it does calls through traditional phone lines, a federal appeals court ruled.

The Dec. 22 order by the 8th U.S. Circuit Court of Appeals in St. Louis upholds a lower-court ruling and is a win for fledgling companies like Vonage Holdings Corp. of Edison, N.J., which provides Voice over Internet Protocol, or VoIP.

The Minnesota Public Utilities Commission had argued that VoIP companies were providing phone-like service and therefore should be regulated as phone companies are. But those businesses said they provide an information service rather than a telecommunications service.

The Federal Communications Commission last month issued its own rules, saying that Internet phone services should not be governed by the same state regulations as traditional telephone companies.

It is up to Casino City's lawyer to bring this up on appeal.

It is certainly not in the court's interest or job description to bring it up, and of course they didn't acknowledge it. It is the interest of the gambling community to publicize this - and NOT to succumb to the DOJ's chilling tactics, including the supression of known FCC decisions.

This defeatist attitude is EXACTLY what the DOJ is trying to achieve - the truth be damned! And we are letting them succeed in our own community? I think not!

The truth is that the FCC ruled. that the FCC (federal communications comission) IS the authority governing this, and they say in effect that the wire act is NOT applicable.

This is not an opinion, it is a fact.

One that they would rather no one was aware of so they can continue with their "chilling" of the industry, which means frightening businesses into stopping to work with online casinos.

There are a number of very good steps that have happened lately, and there are forces in the US in individual states now working to get online licencing off the ground.

Such as this one: Online Poker in North Dakota Update...

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