US Authorities Seize Advertising Revenue In Crusade Against Online Gambling

by Glen Shapiro, LawAndTax-News.com, New York

03 June 2004

According to a report in the New York Times, the US authorities have stepped up their campaign against offshore online gambling sites by seizing advertising revenue paid to media firm, Discovery Communications by Costa Rica-based online casino operation, Tropical Paradise.

According to documents filed in Maryland's federal district court, Discovery was paid $3.5 million by Tropical Paradise to run a series of adverts for the latter's online casino service during the Travel Channel's "World Poker Tour", and a further $350,000 to run advertisements for Tropical Paradise on the Discovery website.

Although Tropical Paradise was informed that it would receive a refund on the unperformed part of the contract if the advertisements did not run, this did not occur. Responding to Tropical Paradise's lawsuit for the return of $3.25 million, launched in April, Discovery did not dispute the firm's claim to the money, but revealed that it had been seized by United States marshals on April 6, and could therefore not be repaid.

Until recently, the crackdown by the federal authorities on those US firms seen to be "aiding and abetting" offshore online casinos had taken the form of investigations and requests for information. According to the NY Times, the US government's recent seizing of the casino-related cash from Discovery has raised serious concerns with First Amendment and media experts.

Speaking to the New York newspaper, dean of the University of Richmond's School of Law, Rodney A. Smolla argued that:

"This is not drug money or terrorist money. The fact it is being treated as such shows a crusader's zeal against offshore gambling."

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