Gaming Portal Sites Under Fire: Millennium Sports Founder Fears Worse for Affiliates

In Part One of a series entitled Gaming Portal Sites Under Fire we take into considering the warning one online sportsbook issues regarding obstacles gambling affiliates face in the months to come.

Christopher Costigan, www.sports911.com

Tommy Miller (name change from "Tom" to reflect a newer, hipper outlook on life) doesn't exactly seem confident when it comes to the direction this industry is going these days.  Sure he's grown more hair over the past few months (courtesy of Propecia) after being permitted to return back to Costa Rica having served a brief one and a half month stint in prison on charges unrelated to gambling while awaiting sentencing.

Miller will be sentenced this July and is expected to serve two more months, then will be permitted back to Costa Rica.  A judge has allowed him to travel back and forth between the U.S. and Costa Rica, where Miller has residency.  Millennium's founder prefers not to discuss the case.  The company remains in good hands with the current management in place.  In fact, Millennium had a banner year with Miller spending much of this period in the States. 

But while Miller fought off charges unrelated to gambling, some of his counterparts find themselves wanted men by the U.S. government, all of which relates to "gambling plus", a term used to describe gambling related activities tied in with components of money laundering. 

Miller himself is not a known target of a current ongoing Grand Jury investigation taking place in the Eastern District of Missouri, but he knows of individuals who are, and not all of them are necessarily operating wagering operations either.

The investigation originally came to light back in October when several radio outlets, print mediums and online gaming portals were subpoenaed on grounds of "aiding and abating" or otherwise facilitating in the promotion of "illegal activity" (more subpoenas were issued in late February). The "illegal activity" in question is none other than online gambling, though failed bills in both the House and Senate over these past four years suggest there are no laws strictly forbidding this activity. 

Nevertheless, we have here a grey area and one thing is clear, anybody operating or profiting from an unlicensed gambling business within the United States proper are crossing a dangerous line.  Gambling affiliates, those who receive a percentage of losses for every player they send to an offshore sports betting or online casino site, face the most serious challenge ahead. 

"I would not like to be a person living in the United States and taking a percentage of player losses," commented Tommy Miller. 

Miller is sometimes deadpan in his delivery, but there was no mistaking the underlying fear in his voice. 

"Accepting a percentage of losses from players is criminal suicide.  You are doing the same thing as someone who owns a sportsbook only you're doing it back home (in the United States).  I think they (affiliates/agents) are gambling with their lives.  They are bookmaking."

And bookmaking as we all know is illegal in the United States, with the exception of Nevada where even then one must work for a licensed casino. 

"This past year will have no affect on this industry," Miller insisted.  "You have (Attorney General) Ashcroft trying to prove a point.  His is trying to convince government and people of the United States that what we are doing is money laundering because it is revenue generated from what they consider illegal activity in the United States."

He explained further that if a betting operation is only holding 5 percent, then it can be assumed 95 percent of the transactions are therefore going back to other venues such as the credit card companies, players, website portals and so on.  This can be misconstrued as money laundering. 

"Ashcroft is using his home stomping grounds (Eastern Missouri) to take action against these companies," Miller added.

One source close to Sports911 suggests that it is merely coincidence that the current grand jury investigation is taking place on Ashcroft's home turf.

"A large number of the major criminal cases end up in Missouri," disclosed our source.

Several well known gaming portal and sports information services have reportedly received subpoenas and/or warnings in recent months to desist from accepting online gambling ads.  Among them: Don Best, Phil Steel (who has reportedly appeared in court a few times already since October), SportsNetwork (who emailed this site out of the blue shortly after reports of the subpoenas, asking what our role in the industry was) College Football News (out of Chicago where advertising online gambling businesses is strictly forbidden by state law) and most of the major radio media outlets including Clear Channel and Infinity.  Pro Football Weekly, one of Millennium's top advertising venues in past years, and Athlon Magazine (an SBG Global stronghold) have also stopped accepting offshore sportsbook advertisements.  Other print publications will likely follow suit.

Companies that expressed little concern back in October have since changed their stance.  A spokesperson with the Howard Stern Radio show, one of the highest rated syndicated programs in the United States, commented at the time that they had not been served any subpoenas and weren't worried about the matter. A few weeks later they yanked all advertising for BetonSports, GoldenPalace.com and Party Poker.

As reported by the New York Times this past week, the investigation into the activities of media, public relations and technology companies relies on a controversial legal concept that holds that the American businesses, by providing advertising and other services that support Internet gambling, are "aiding and abetting" online casinos. That gives prosecutors an indirect way to attack the overseas enterprises, whose operations are illegal here but fall outside their jurisdiction.

Lawyers said they were not aware of any charges that had been filed. Still, the campaign, which has gone on for months, has already chalked up some significant nonlegal victories.

The investigation also underscores the complex legal and political issues raised by the borderless Internet. The overseas casino operations are legal and licensed in the jurisdictions where they are based, permitting them to reach through the Web to customers in the United States, where federal and state laws forbid the operation of unlicensed casinos.

The U.S. government is suggesting that companies which accept online gambling ads may be aiding and abetting in criminal activity.

By sending an official notice to various trade groups, publishers, broadcasters and website portal owners, the government was giving companies "knowledge" that Internet gamblers were committing a crime, one of two main elements to the crime of aiding and abetting.

But aiding and abetting has a second element — whether the broadcaster is furthering the commission of a crime, according to Jennifer S. Granick, the executive director for the Center for Internet and Society at Stanford University Law School.

Granick told the New York Times case law suggested this might be hard for the government to prove; television and radio audiences are so broad that many, if not most, of the people watching or listening to an advertisement are not going to place a bet over the Internet. "It's not at all clear that they're breaking the law," Ms. Granick said, noting that the broadcasters could be seen as merely disseminating information. "There's strong reason to think the opposite because they are broadcasting to a general audience."

The investigation has recently spread beyond advertising. Mr. Sinclair, a research analyst for Christiansen Capital Advisors of New Gloucester, Maine, said the subpoena he received two weeks ago asked him to provide information not just about advertisers working with overseas Internet casinos, but also about public relations firms, consultants, banks, and software and telecommunications companies.

Whatever the outcome, the U.S. government has succeeded in scaring a large chunk of online gaming advertising venues.

"This leaves us with less avenues in which to advertise now," Miller said. 

He also commented on how such a policy by the government will effectively cut off the number of gaming businesses operating offshore today. 

"(Online gambling companies) starting out now don't have a shot.  Next year, anyone who is starting up this type of business must have a death wish no matter how much money they might have."

Since marketing plays a huge role in building these companies and making them profitable, there will be few places for internet gambling establishments to turn. 

Watch for Part II of this series tomorrow where we will look at some of the inherent dangers surrounding gaming portals that accept advertising from internet wagering facilities. 

Originally published on March 21, 2004 (1:50 pm EST)