Rio Sets Dot-Net Guidelines for WSOP Expo

Las Vegas' Rio Hotel and Casino has put companies scheduled to exhibit at the upcoming 2nd Annual Gaming Life Expo on notice that promoting Internet gambling services will disqualify them from participating at the event. The venue sent a memo to exhibitors stating that those of them with free-play (dot-net) sites must post disclaimers at the sites explaining that the sites are purely for educational services. Further, the sites must not contain any links to real-money (dot-com) sister sites.

The Rio, which is hosting the show alongside the World Series of Poker, says it received information from the U.S. Department of Justice articulating these standards and insisting that exhibiting vendors comply with federal law.

It's one of many warnings issued by the DOJ over the course of the last three years pertaining to the promotion of online gambling services.

The DOJ initiated its crackdown on Internet gambling advertising in 2003 by sending warning letters to various U.S. media outlets and organizations that threatened aiding and abetting charges for accepting online gambling ads. While there have been no prosecutions, a handful of media outlets have agreed to pay fines for carrying such ads.

These developments have hampered I-gaming operators' ability to promote their services in the United States, although the problem has been somewhat remedied by the deployment and promotion of dot-net sites. The sites provide free-play versions of the same games offered at sister dot-com sites.

In light of the DOJ's position on advertising I-gaming services, many operators of dot-net sites have been careful from day one to eliminate all linkage to the dot-com versions, but this is the first time Rio has put forth an edict of this specific nature.

Created by Harrah's Entertainment Inc. (owners of the Rio and, as of 2003, the World Series of Poker), the Gaming Life Expo enables vendors to showcase their wares before a well targeted crowd of avid gamblers. The exhibition is strategically located next to the main WSOP tournament room where all the action is. Many visitors wander through the expo on their way to the games and have a look at what's new and hot. Others (both players and spectators) dip into the expo for a much needed break from the chaos. For I-gaming groups, it is a golden opportunity to get their products in front of a mainstream audience that's hungry for poker. Last year's I-gaming exhibitors included such bigwigs as PartyPoker, Bodog and FullTiltPoker, all of which will be back this year promoting their already well established names. But the show also presents an opportunity for smaller players like HollywoodPoker, JetSetPoker, and BelmontPoker to find their way into new popularity.

Jeff Gilroy, head of business development at Belmont.com, wants to see his company make a splash. "We hope to utilize this event to soft launch our brand into the poker community," Gilroy said. "Most of the larger Web sites are looking to focus on a very well targeted group of consumers, using the event to further establish their brands within the gaming community."

Belmont.com won't have an opportunity to make a splash, however, until they adjust Belmontpoker.net to meet DOJ specifications. At the moment, links on the site to "Free Casino Games" and "Free Sports Gaming" connect directly to Belmont.com, the pay-to-play site.

Gilroy said the site is being amended to fit the Rio's WSOP criteria.

The memo points to Doylesroom.net as an example of what an appropriate disclaimer should look like. The memo states:

Here is an example from Doyle's Room.net of what this disclaimer should state: "The DoylesRoom.net Web site discloses the following: that it does not permit players to wager real money; that chips in players' accounts have no monetary value, and cannot be exchanged for anything of value; and that any and all references in the Web site to "pots," "limits," "betting" or the like are solely for instructional or illustrative purposes and do not involve wagering real money or other items of value."

But, while the site contains the proper disclaimer, it also has a link to the dot-com site, Doylespokerroom.com.

Show Manager Sharon Wayne said Doylesroom has received the memo and plans to make the proper changes. No one at Doylesroom could be reached for comment.

And as for other exhibitors, there doesn't seem to be much fret over the memo.

"The edict is not new and we have been aware all along about the restrictions on dot-net advertising," PartyGaming's John Shepherd said. "I don't think it's a big deal. Same rules as before."

Larry Walters, a First Amendment lawyer with the firm Weston, Garrou, De Witt and Walters, feels the DOJ would not have much of a case against vendors that don't adhere to the new regulations because Congress has passed no laws pertaining to any form of online gambling advertising whatsoever.

"Online gambling advertising is not specifically addressed in any federal law," Walters said. "The First Amendment to the U.S. Constitution protects commercial speech, such as advertising."

Nevertheless, he added, I-poker sites will want to conform to the requirements set forth by the DOJ so that media outlets will feel comfortable running ads for them.

The battle that started in 2003 between the DOJ and the online gambling industry has not to this point led to any prosecutions, and no case involving dot-net advertising has been tested in court. The biggest fallout has perhaps been the $7.2 million settlement the Sporting News reached with the DOJ in January.

An argument could be made, Walters said, that because the government cannot regulate online casino or poker sites under current federal law, such sites cannot be prohibited under the pretense of aiding and abetting theories.

"Alternatively," he added, "it could be argued that the advertising of online casino/poker sites, which are licensed in their domicile jurisdiction, is legal under the holding of Greater Orleans Broadcasting Assn. v. U.S., a United States Supreme Court case decided in 1999. Under that theory, advertising of gambling activities that are licensed in the jurisdiction of origin (e.g. Malta) cannot be prohibited merely because the advertising is received in a jurisdiction that prohibits gambling (e.g. the United States) Again, neither of these theories has been tested in the online gambling context, but both are viable arguments."

By circulating the memo, the Rio has demonstrated full observance of the DOJ's advice, but in this case, the only probable action that could be taken against an exhibitor is a being barred from the show. For the Rio, Wayne said, that is the bottom line.

"Everyone has to comply," she said, "or they won't be in the show."

Click here to view a copy of the Rio memo.