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Kevin Smith

Stern, Other Media Outlets Pull Gambling Ads

16 October 2003

The reasons still aren’t known, but a host of national media outlets are pulling the plug on Internet gambling advertisements.

Operators of online casinos and sports books have found radio advertising as one of the key channels for marketing their business, but all that could be changing soon.

Richard Rowe, CEO of Golden Palace, confirmed on Wednesday that representatives from the Howard Stern radio show contacted them informing the online casino that it was no longer running advertisements for interactive gambling operations.

Rowe said he was surprised to hear of the move considering the history between the two companies.

“We have been advertising with them for over three years now,” he said. “It really caught us off guard especially considering this cleared their legal department when we first started advertising with them.”

The move was especially surprising in light of a stance just last week from a show spokesperson. After reports of a Grand Jury investigation into the advertising practices of the industry and subpoenas handed down to radio stations and other media outlets, Stern officials said they hadn’t been served with papers nor did they have any intention of changing their advertising practices.

“Our lawyers studied this issue and we are in full compliance of the law,” Rowe said.

Rowe also said there was no indication about what sparked the move from Stern officials to do such an about-face with their advertising policies but said if he had to guess the Grand Jury investigation probably had something to do about it.

Golden Palace has been a mainstay on the Stern show, sponsoring on-air contests, card games and other give-a-ways. The Golden Palace spokesperson said the campaign with the show got off to a huge start when they first went on the show, but then reaction to the ads leveled off, but it was still a worthwhile effort.

“It wasn’t one of our best, but it was a very good campaign for us,” he said. “If it wasn’t we wouldn’t have stayed with them for three years.”

Another major advertisor to the Stern show is Officials with the Costa Rican-based online sports book had no comment about the Stern situation.

Officials with Stern didn’t return phone calls seeking additional comments regarding the latest developments. A spokesperson with Infinity Broadcasting, which handles the syndication of the Stern show, did confirm that their legal department recently advised programmers to cease carrying all Internet casino and sports book ads.

BetOnSports also advertises extensively on the Jim Rome Show, a popular all-sports radio show syndicated by Fox Sports.

Published reports also indicated that Clear Channel Communications, an Indiana-based company that operates radio stations and syndicated programs all over the U.S., pulled advertisements for online casinos and sports books. A marketing spokesperson with CCC had no comment on the issue and deferred all questions to the company’s legal department. Messages with CCC lawyers weren’t immediately returned.

The U.S. District Court in the Eastern District of Missouri subpoenaed radio stations, portal sites, print media publications, and a host of others related to the interactive gaming industry last month as part of a Grand Jury investigation.

Included in the subpoenas was a copy of a letter from the Department of Justice to a host of trade associations and business groups informing them that carrying advertising for online casinos and sports books could open up media outlets to criminal charges of aiding and abetting.

Gambling law expert Cory Aronovitz, a lawyer in Chicago, said the aiding and abetting argument against a company that carries advertisements is unprecedented in the legal system, not to mention the First-Amendment rights issues that will be raised with the investigation.

He cited a Supreme Court case, Central Hudson vs. New York, that sets the standard for determining whether commercial speech and advertisements are protected by the First Amendment.

“The advertisements clearly comply with the Central Hudson test so the Department of Justice is really off base with this one,” he said.

Stern, Other Media Outlets Pull Gambling Ads is republished from
Kevin Smith
Kevin Smith