It’s only the major media players who have gotten heat from the government for accepting gambling ads, and the only penalty has been fines, not criminal charges. All of the minor media has been spared so far. Even Casino City, the largest website on the Internet which carries online gambling ads, hasn’t received a cease and desist notice from the government.
Of course, just because publishers haven’t faced heat yet doesn’t mean they never will. Publishers run the risk of being charged wth three separate crimes.:
Aiding & Abetting. In short, advertising something that’s illegal, is also illegal. Since online casinos & poker aren’t illegal there should be little problem, but advertising online sports wagering could be a problem, because sports betting violates the Wire Act. I don’t run ads for online sports on Vegas Click.
Being in the Business of Gambling. Most small publishers act as affiliates, getting a percentage of player losses when they refer players to an online gambling site. But the argument could be made that if you share in the gambling profits directly, then you’re “in the business” of gambling, and could face the same charges that the gambling operator itself faces. Here again, the gambling operation itself would have to be illegal in order for a publisher to have this liability. Casino and poker aren’t specifically illegal, though situs poker online sports betting definitely is. One way around the “Being in the Business” risk is to sell your adspace for a flat monthly fee, rather than as an affiliate who gets a percentage of sales. That’s what I do, and what the Wizard of Odds does, for that very reason. However, very small publishers will often have a hard time getting gambling sites to pay a monthly fee rather than on an affiliate basis. I don’t know how CPA (cost-per-acquisition) fits into this, where you get paid for every new player you refer, regardless of how much they win or lose, though I suspect the risk would be somewhere between revenue-share affiliate and monthly-basis sales.
Conspiracy. Conspiracy is two or more people planning a crime. So basically, any time a crime is broken and more than one party is involved, the feds can tack on a conspiracy charge. As with the others, this requires that some other law actually be broken first.
Casino City case. In August 2004 Casino City sued the DoJ to establish its right to accept ads for Internet gambling. A judge dismissed the case, saying Casino City didn’t have standing because it hadn’t received one of the cease & desist letters. Casino City filed an appeal, but before it could be heard, Casino City withdrew from the case in February 2006, apparently because they felt that they’d made their point: If the government ever tells Casino City that it can’t accept gambling ads, Casino City will fight. (Lawrence Walters, Esq.)
State Law. Even if one doesn’t run afoul of the feds, there’s a chance that state government will come calling. In June 2006 the state of Washington advised the owner of the gambling portal IntegrityCasinoGuide.com that advertising online gambling violated Washington law. The site owner took the site down, and it appears that he faced no penalty. (Poker News)
The Future. Again, I don’t know of any small publisher who’s been hit for running ads, though I can’t say that will never happen. My guess is that small publishers would get a warning letter first before any criminal indictments were made. Probably the biggest risk is that the government might seize the domain name, so that even if there were no criminal charges, the publisher might be deprived of their livelihood.
Buying advertising as a casino, poker room, or affiliate (Risk Level: 2)
The only buyers of advertising who have been targeted have been offshore sportsbooks. Casino and poker operators haven’t faced any action. While the DoJ waved a finger at Esquire for taking Bodog’s poker ads, their attention was directed at Esquire, not the operator, Bodog. Affiliates and portals have never received attention from the government, so far as we know.
Making bets on the internet (as a player) (Risk Level: 1)
There’s no federal law against playing the games themselves, as a player. Even a U.S. Attorney admitted in 2007 that placing wagers online doesn’t violate federal law. As attorney Nelson Rose said, “There is no federal law against being merely a player. About half the states do have ancient laws on the books that sometimes make it a crime to make a bet. But you have a better chance of winning the World Poker Tour than of being arrested.” (Casino City) So far as we know, no U.S. citizen has ever faced federal charges for gambling online.
Now, two players we know of were charged under their state laws. Jeffrey Trauman of North Dakota was charged in 2003 for making sports bets online, but he likely attracted attention since his winnings seemed to be over $100,000. (Gambling & the Law) And Roland Benavides in Oklahoma was charged, possibly attracting attention because he’s also a police officer. (Norman Transcript) Oklahoma doesn’t specifically outlaw online gambling, but their draconian statutes outlaw just about any kind of gambling whatsoever, so Benavides was charged under the general gambling statute. (News OK) In 2012 he received a deferred sentence, which means that if he doesn’t violate the terms of his probation, he’ll likely face no jail time. (News OK)
I don’t have the resources to cover all the various State laws, but here’s a little bit anyway.
Delaware became the first state to legalize online gambling, in June 2012, and the third to launch (Nov. 26, 2013). (USA Today, Delaware Online, Casino.org)
The District of Colmbia became the first jurisdiction to legalize online gambling in the U.S., in April 2011. However, the measure was repealed in February 2012 before it ever became active. (NY Times)
A Kentucky judge agreed to allow Kentucky seize 141 gambling-related domain names, since online gambling violates Kentucky law. This was plainly absurd by that logic any country could seize any domain anywhere in the world if the website happened to violate local law. The Kentucky Court of Appeals quickly overturned the action, but then the State appealed, and now the court is saying that the domain name owners have to come forward or else risk losing the domains. However, if they appear in court then U.S. authorities might arrest them for operating online gaming sites. (EFF 2008, KY appealed in 2009, “Must appear” ruling in 2010 )
New Jersey became the third state to legalize online gambling (poker + casino), signed into law in February 2013, and launching on Nov. 25th. (NJ Poker Online)
Nevada became the first state to legalize gambling (well, poker at least), on Feb. 21, 2013 (CBS) and launching on April 30. (LVRJ)
In North Dakota, Jeffrey Trauman paid a $500 fine on what was probably over $100,000 in sports bet winnings. (Gambling & the Law, 2003)
Oklahoma doesn’t specifically outlaw online gambling, but their draconian statutes outlaw just about any kind of gambling whatsoever, so when police officer Roland Benavides was caught placing sports bets online in 2011, they charged under the general anti-gambling statute. In 2012 he received a deffered sentence (which means that if he doesn’t violate the terms of his probation, he will likely face no jail time). (News OK)
In Washington State, it’s a felony to play poker online, punishable by up to five years in prison and a $10,000 fine. (GPWA 2010, PokerListings 2008)
Old Summary of State Laws. Chuck Humphrey has a summary of state gambling laws, but as I write this in Nov. 2015, it hasn’t been updated since 2007. According to the list, at that time only Illinois, Indiana, Louisiana, Montana, Nevada, Oregon, South Dakota, Washington, and Wisconsin had express prohibitions against Internet gambling.