Web Giants bend in illegal Gambling Ads Case

Microsoft, Google and Yahoo: three biggies of the web world had to put their feet down in the illegal web gambling case and have agreed to pay $31.5 million to settle the federal claims of these companies promoting gambling on their websites.

The amount will be distributed amongst the 3 companies with Microsoft paying $21 million, following Yahoo with $7.5 million and Google directly paying $3 million to the treasury.

The payment by Microsoft and Yahoo will be done in three ways; with some money to be paid in cash, some part to be given to International Center for Missing and Exploited Children and the rest to be paid in the form of public service campaign ads over the period of 3 years.

"These sums add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote-control illegal gambling enterprises," said Catherine Hanaway, U.S. Attorney for the Eastern District of Missouri.

"Honest taxpayers and gambling industry personnel who follow the law suffer from those who promote illegal online behavior," she added.

The announcement of the settlement was made by Ms. Hanaway saying that without admitting or denying liability, the three companies agreed to pay the millions of dollars they took in from the suspect ads and also vowed that they will not indulge in any such activity again in the future.

Online gambling and the ads to the links for the gambling sites were made illegal by a law in U.S. almost a year ago. All the companies said that they stopped the gambling ads in 2004 only, when they got the warnings from the Government about the illegal nature of these ads.

U.S. Government had recently increased the pace of the interrogations and arrests of the top executives of publicly traded British companies that have accepted online bets from Americans. The government also has reached a multimillion-dollar settlement with EBay Inc.'s PayPal subsidiary for processing gambling transactions.

Hanaway said her office was continuing to investigate whether other forms of promotion, such as the sponsorship of televised tournaments by a poker company affiliate, were indirectly used to promote online gambling.

Meanwhile, she praised all the three Internet companies for their cooperation and commended that their efforts to spread awareness that online gambling is illegal even if the bet is being placed in other country.

In fact, it is noticeable that the settlement agreements cover the years 1997 to 2007 to provide the companies more protection from prosecution. This has been made possible by the sheer co-operation of all the firms, she said.

"We wanted to make sure we covered all possible activity," Hanaway said.

All the three companies also released their statements on this issue, with Microsoft spokesman, David Bowermaster saying that they had stopped the advertisements nearly four years ago and his company was always ready to make people aware of gambling being against law.

Yahoo also reiterated its commitment to stop gambling in U.S. and said it only accepts search ads in Britain, where online gambling is legal.

Jon Murchinson, Google spokesman said the ads were in sponsored links at Google.com and other Web sites that belong to its ad network. “While we did not admit any wrongdoing, the Department of Justice has advised that online gambling is illegal in the United States, and ads to promote it are improper,” he said.