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Kevin Smith Ad Sparks Warning From Montana Regulators

11 December 2003

A simple classified ad placed in a hope to spark business for has turned into a firestorm of trouble for the Curacao-based Internet sports book operator.

Last week a Montana newspaper ran an ad encouraging people to invest in an on-line casino. The ad claimed a site could be set up for as little as $499 and owners could see a return on their investment of up to $5,000 to $10,000 a week.

In addition to some questionable boasts about the interactive gaming industry – many experts question the validity of setting up a legitimate gaming site for so little, and are leery of the ability of an owner to make that much in a week with that little of an investment – the ad caught the ire of regulators in Montana.

Gambling Control Division administrator Gene Huntington issued a press release the day the ad ran informing residents that it is illegal to both operate and play at online casinos and sports books in the state. In his statement he said anyone operatoring such a business in Montana could face criminal charges.

The ad said a company in Phoenix would set up a Web site for people responding to the ad. The customer would then solicit others to visit the site to make online sports wagers, or to gamble on online activities such as roulette, craps or slot machines, all of which are illegal in Montana, Huntington explained.

In addition to sending out the advanced warning to residents, Huntington said he wanted to hear from any resident that contacted the company about potentially doing business with them.

On Thursday, nearly a week after the ad was placed, he said regulators haven't heard from any residents who might have called Sirbet and the offshore operator was now getting attention they probably didn't want from his office. He said an agent had been assigned to the case and was trying to make contact with the company, but to date was unsucessful.

IGN's efforts to reach somone at Sirbet were unsuccessful as repeated phone messages weren't returned.

Huntington said he was shocked to see the ad in The Billings Gazette.

"We get complaints every now and then about online casinos or their advertising practices," he said. "This takes it to a whole new level though, encouraging them to invest in the business."

Although he has no number to prove it Huntington suggested that residents throughout the state gamble online, and he realizes most agencies' hands are tied in trying to combat it.

"We are aware that it is a widespread activity," he said. "People just don't realize that this is an illegal activity. We are assuming that our efforts will make everyone aware of that."

Montana regulators and legislators have had a close eye on the future of the industry in the state, Huntington said. Before the 2003 legislative session started regulators prepared some possible legislation for the state that would have studied the industry, but the bill was never introduced.

It is likely Montana will not move forward with a legislative stance towards Internet gambling until something develops at the federal level or in another state.

"We have been watching the situation in Nevada closely for a couple of years now," he said. "We want to be ready if something happens down there so we are in position to maximize our strength. But things will need to sort themselves out at the federal level first I think."

Huntington said all gambling is illegal under Montana's Constitution unless specifically authorized by the Legislature. Even when a certain segment of gambling is legalized, a law bars Montanans from gambling on credit, and most Internet sites require credit cards to place wagers.

John Tooke, a member of the state Gambling Advisory Council and owner of the Golden Spur Casino in Miles City, told the Associated Press that anyone trying to stop online gambling from happening the U.S. is probably fighting a losing battle.

There's really not much else the state can do, he said.

"It's going to be difficult to stop people unless you start kicking down doors and that's not a viable public policy," he said.

Gazette officials said the ad wouldn't be running again in the paper and Huntington is confident that other media outlets in the state will follow suit.

The warning from the Gaming Control Division comes at a time when advertising practices of the industry are at the forefront of legal arguments. In September news broke of a Grand Jury investigation that resulted in a slough of media outlets being subpoenaed and questioned about interactive gaming clients they had.

Fallout from the investigation included a host of national and local media outlets pulling advertising from the industry. Huntington said he was unaware of the Grand Jury investigation and the statement from his office was done independently from any Department of Justice investigation. Ad Sparks Warning From Montana Regulators is republished from
Kevin Smith
Kevin Smith