Internet Companies Slapped With Suit Over Gambling Ads

Internet Companies Slapped With Suit Over Gambling Ads
Rhett Pardon
SAN FRANCISCO — Sex.com is among a list of Internet firms named in a class-action suit filed Tuesday that claims the companies sell rights to web advertisements that are illegal in California.

The suit demands that the companies stop accepting the advertisements based on searches for terms such as "illegal gambling," "Internet gambling" and "California gambling." It also asks for the companies to give consumers in California "millions of dollars in ill-gotten gains," according to attorney Ira Rothken, who is representing plaintiffs Mario Cisneros and Michael Voight.

The 60-page suit, filed in San Francisco Superior Court, also claims the Internet companies use geotracking software to target certain regions or illegal gambling ads.

More than a dozen high-profile online companies are named as defendants, including Google, Alta Vista and Overture. The suit also names 100 John Doe defendants, which could include other online adult companies.

“Defendants obtain revenue from these websites when they convince users to ‘click-through’ to the advertisers’ websites,” the suit says. “In the case of illegal gambling, this ‘click-through’ directs California users to Internet gambling websites where persons in California are enticed to gamble away their hard-earned savings using their home and work computers.”

The plaintiffs of the suit, acting for all Californians, say the companies raked in a majority of the millions of dollars gambling firms spent on advertising, despite the fact that it is illegal in the state.

Sex.com, the suit says, uses paid advertisement listings for Casino Tropez, Showdown online casino and Lucky Nugget Casino.

Sex.com also operates a directory service with special websites for casinos called Casino.sex.com, the suit says. That site provides paid advertising content for numerous Internet gambling sites. Results from Sex.com note that the search is being conducted in the United States by using the notation “(US)” with its search results.

Calls to Gary Kremen, owner of Sex.com, were not returned to XBiz at posting time.

Voight of Scotts Valley, Calif., one of the lead plaintiffs in the case, said he used search engines in the state to find Internet gambling websites, and as a result lost over $100,000 in Internet bets.

The plaintiffs, led by the class-action specialist William Lerach of San Diego, seek restitution, forfeiture and disgorgement of illegal gambling proceeds.

The suit asks that proceeds be distributed to spouses of gamblers who have had community property taken from them as a result of the gambling, as well as to California Indian Tribes, other licensed gambling businesses and to the state treasury.

In its complaint for violations of California’s Business and Professions Code Sections 17200, the plaintiffs also seek to enjoin the online firms from participating in, and continuing to market, sell, and display advertising for Internet gambling in California.

Tuesday’s lawsuit is the latest to involve online gambling, which has become a multibillion-dollar-a-year industry and is usually focused on online poker or blackjack.

Wireless interests, including some Western European cell phone service providers, also offer gambling opportunities to their subscribers.