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Feds Step Up Push Against Online Gambling

31 May 2004

UNITED STATES – As reported by the New York Times: "Federal law enforcement officials routinely seize money they suspect is connected to activities like money laundering, terrorism or drug smuggling. But in early April, United States marshals seized $3.2 million from Discovery Communications, the television and media company, in an aggressive effort to crack down on a new target, Internet gambling.

"…The money initially belonged to Tropical Paradise, a Costa Rica-based Internet casino operation, which in October paid Discovery for television spots to advertise an online poker room, ParadisePoker.com. According to court documents, the government seized the money and told Discovery, which is based in Silver Spring, Md., that it could be party to an illegal activity by broadcasting such advertisements.

"Federal prosecutors contend that online gambling sites are illegal, but the offshore casinos fall outside their jurisdiction. So for nearly a year, the government has been trying to curb the sites' activities by investigating and pressuring American companies that provide services to offshore gambling sites on the theory that they are 'aiding and abetting' the operations.

"Until now, the effort has largely involved seeking information from American companies, including major broadcasters, Web portals and industry consultants. The seizure of money significantly escalates the government's attack.

"…The legality of online betting is a complicated matter of some dispute in the United States. The government asserts that the federal Wire Act prohibits all Internet casinos, but the courts have been divided, legal scholars said.

"…So far, executives at media companies have not voiced public challenges to the government campaign…"

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Feds Step Up Push Against Online Gambling is republished from Online.CasinoCity.com.