educational

Adult Industry Legal Update: July, 2002

This month's legal update examines several recent concerns over virtual child pornography, online gaming, escort Websites, and more. Here's the latest information you need to know...

Virtual Child Pornography
The House Judiciary Committee sprang into action this month by approving a bill designed to address the Supreme Court's recent decision striking down the virtual child pornography law, Ashcroft v. Free Speech Coalition. The Committee approved a bill that would outlaw computer images that were indistinguishable from actual photographs or movies. The bill would also ban any images of prepubescent children engaged in sexual activity, whether virtual or not. The bill shifts the burden of proof to the defendant to show that the images in question were entirely computer-generated and not an actual depiction of actual events. Some lawmakers disagreed with the newest attempt to regulate virtual child pornography: "I think this bill is the newest in a series of attempts to do what the Supreme Court has said we repeatedly cannot do," said New York Democrat Jerry Nadler. A similar bill was recently introduced in the Senate by Sen. Jean Carnahan, D - MO. The bill passed the House and now moves on to the Senate for approval.

House Looks At Online Gaming
The House Judiciary Committee also took up the controversial issue of online gambling this month. The bill, introduced by Rep. Bob Goodlatte (R-VA), is entitled the "Combating Illegal Gambling Reform and Modernization Act." After various stalled attempts by Congress to outlaw Internet gambling by United States citizens using offshore casino Websites, it now appears that Congress is ready to act on the issue through Rep. Goodlatte's bill. The House Judiciary Committee approved several amendments to the bill, which would expand the prohibitions to include bingo, games of chance and selling lottery tickets online. The amendments even went so far as to eliminate exceptions for charitable organizations. The bill now goes to the full House for further action. Given the fact that many of the previous supporters of the Bill, like the American Gaming Association, pulled out after once this latest version was proposed, the Bill has little chance of actually becoming law. However, adult Webmasters who utilize online casino affiliate programs should closely follow this legislation since it may empower the government to prohibit certain promotions such as banner ads for offshore casinos.

CIPA Struck Down by District Court
Score another one for the good guys! Based on First Amendment grounds, a United States District Court panel of three judges in Philadelphia struck down the Children's Internet Protection Act ("CIPA"). This law represents the third attempt by Congress to control online erotica, all of which have suffered defeats in the courts. CIPA would have prevented public libraries from receiving federal funds for technology unless the libraries installed filtering devices to prevent access to adult materials. Filtering technology has been roundly criticized as ineffective by Free Speech advocates. The judicial panel found that significant portions of the CIPA law were "facially invalid under the First Amendment to the United States Constitution. On June 20, 2002, the Government appealed to the United States Supreme Court for review of the decision. How many defeats will it take before the government gives up on its attempts to censor the Internet?

FBI Investigates Innocent Civilians
In a throwback to the McCarthy Era, the FBI will now be allowed to investigate and conduct surveillance on innocent civilians, including their online activities. The Bureau has canned the so-called "Levy guidelines," which were drafted in the 60s and generally prevented the FBI from spying on political and religious groups in the absence of reasonable suspicion of criminal activity. Using the War on Terrorism as a justification, however, Attorney General John Ashcroft announced that FBI Agents will now be encouraged to visit public places and conduct online surveillance of individuals and groups without any evidence of criminal activity as a "preventative measure." Internet privacy advocates have become alarmed by the new broad surveillance powers seized by the FBI, and are concerned that cyberspying will explode to new levels. Of great concern is the so-called "Magic Lantern," believed to be the FBI's latest and most guarded program designed to let agents track Web browsing activity, including email and password access, without detection. "It allows them to bug a computer in ways that in the past they were not able to do," said David Sobel, an analyst for the Electronic Privacy Information Center. For the record, the FBI refuses to confirm or deny whether Magic Lantern exists. However, according to Sobel: "It's not someone's paranoid fantasy, there is the existence of such a thing."

Escort Websites Being Targetted
Escort Websites have been the target of some recent prosecutions in Florida. Officials with the Metropolitan Bureau of Investigation arrested Charles S. Kelly, of Tampa, and Steve E. Lipson, of Boca Raton on various counts of racketeering, deriving support from prostitution, and promotion of prostitution. Law enforcement officials set up a fake Website to be included within the Defendants' promotional portal. As soon as the fake site was included, it received thousands of hits, according to the Hillsborough County Sheriff's Office. "The wave of the future is really to do prostitution this way," said Assistant Statewide Prosecutor Christopher Brown. The site had over fifty thousand users, and advertised dates with porn stars for as much as $17,000 a night. The owner of another Central Florida-based website, www.bestadultclub.com, was also arrested on racketeering and prostitution charges earlier this month. The website advertised a long-standing gentlemen's club in Cocoa, Florida. Based in part on information contained on the site, law enforcement officials arrested the owner along with numerous employees, and froze all the club's assets. The owner has retained the author's firm to assist in defending the charges and to investigate potential civil rights abuses committed during the investigation and arrest. Given the recent proliferation of escort sites, Webmasters should closely consult with their counsel regarding the legality and method of operation of any such Website. "Law enforcement officials set up a fake Website to be included within the Defendants' promotional portal."

Jerry Falwell's Domain Name Claim
Jerry Falwell just can't seem to catch a break in the legal system. After the highly publicized loss to Larry Flynt and Hustler magazine in the United States Supreme Court, you would think that Falwell would have given up on the courts. However, Falwell decided to file a claim against a Website that pokes fun at him and uses his name without consent. Falwell filed the complaint with the World Intellectual Property Organization, ("WIPO"), seeking a transfer of the subject Website, www.JerryFalwell.com, based on alleged trademark and other intellectual property violations. The three-member panel of WIPO ruled that protections should be limited to personal names that have been commercially exploited. No such commercial exploitation of Falwell's name occurred, and the panel rejected Falwell's claim that he has a common law trademark on his name. For his part, Falwell plans to appeal to federal court.

Chilean Government Installs Filters
On the lighter side, it seems that adult Websites are the home page of choice for public officials in Chile. Government officials have admitted that a civil servant's addiction to online erotica has caused all of the government's computers to crash. The computer failure lasted for two days and essentially ground government operations to a halt. The Chilean government has now installed filtering software and the responsible government official was sacked.

Another Photographer Arrested
Finally, it appears that another photographer has been arrested for taking pictures of young girls. Kenneth O'Brien, from Oklahoma City, a graphic designer for fourteen years, allegedly took illicit photographs of a fourteen-year-old girl. Instead of child pornography, O'Brien has been accused of distributing obscene material. And so it begins:

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com, www.FreeSpeechLaw.com or AOL Screen Name: "Webattorney".

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

profile

BranditScan's Aerie Saunders on Fostering Creator Knowledge, Confidence and Community

Aerie Saunders is firmly in her season. When she sits down with XBIZ, a fall-scented WoodWick candle burns in the background, pumpkins decorate her desk and the first signs of spooky season are already on display. Not that Saunders waits until autumn to embrace the macabre.

Jackie Backman ·
opinion

What Mastercard's Scam Monitoring Program Means for Adult Merchants

Mastercard's Scam Merchant Monitoring Program (SMMP) has introduced a new, investigation-led framework that works very differently from the ratio-based chargeback programs the industry has relied on for years. It applies to card-not-present merchants globally, and Mastercard's guidance on business models warranting closer attention includes adult content and dating platforms, along with subscription services, digital goods and forex.

Len Garcia ·
opinion

Why the Right Merchant Category Code Matters for NSFW AI Businesses

You explained exactly what your NSFW AI business does to your payment processor and they seemed to get it. The underwriting process felt thorough and exhausting, but it was well worth it because you began processing.

Jonathan Corona ·
opinion

How Local Payments Can Expand Access and Reduce Friction at Checkout

Global adult platforms often enter new markets with a familiar assumption: If their checkout accepts major cards, they're ready for local customers. In reality, payment habits vary widely by country. Dutch consumers use iDEAL for online shopping, BLIK is a leading e-commerce payment method in Poland, and India's UPI handles billions of transactions each month.

Mitch Platt ·
opinion

How Detailed Receipts Build Consumer Trust and Reduce Chargeback

When was the last time you bought something online? Chances are you looked for the confirmation almost immediately. Did the transaction go through? Does it show what you bought? Were you charged correctly? And if there's a problem, who can you contact?

Cathy Beardsley ·
opinion

What Adult Platforms Should Know About the EU AI Act

The European Union's Artificial Intelligence Act is now largely in force, creating new obligations for adult platforms using AI for content creation, performer verification, age estimation, moderation and other functions.

Corey Silverstein ·
profile

Verifymy's Emma Robert-Tissot on Putting People at the Heart of Online Safety

Warm, friendly and always happy to help, Emma Robert-Tissot has a gift for making even the most complex corners of online safety feel approachable.

Jackie Backman ·
profile

YourVids' Gino on Listening, Learning and Putting Creators First

Get Gino talking about the work creators pour into their careers, and his passion quickly becomes contagious. He deeply appreciates the people powering the business and has firm ideas about what they deserve in return.

Jackie Backman ·
profile

Vendo CEO Mitch Platt Reflects on 20 Years of Lessons and Evolution

More than 20 years ago, three entrepreneurs in Barcelona began gathering over beers to pitch, dissect and routinely destroy one another's business ideas. The ritual was simple: One person arrived with a concept, while the other two tried to expose every weakness. Any proposal that survived earned another look. Most did not.

Jackie Backman ·
opinion

How to Avoid the Hidden Risks of AI-Generated Legal Documents

Artificial intelligence can write a contract in seconds, but that does not mean it can write the contract your business actually needs. Across the adult industry, operators, creators and producers are increasingly using generative AI to prepare model releases, performer agreements, privacy policies, takedown notices, employment documents and responses to regulators. The appeal is obvious: Legal work is expensive, AI is fast and the resulting document often looks impressively professional. That polished appearance is exactly what makes the practice dangerous.

Corey Silverstein ·
Show More