That part about search engines being held accountable for having links to gambling sites is pretty interesting, especially since last I remember both Google and MSN are operated out of Washington.
My question on this is where the jurisdiction lies? If you are hosting a site in another state or another country, and working with all offshore casinos and not advertising your site locally, can they still come after you just because you happen to live in the state and work on your sites from behind your computer screen? Would be an interesting question to ask your lawyer.
In either case, this does seem like a breach of your First Amendment rights, so perhaps you could get the ACLU on your side if the state comes after you.