Legal? Don't bet on it
The billboards picture several people posing as excited football fans--one apparently wearing a Vikings Jersey. The billboards read: Vikings, 53; Boat Cruises, 0; Sportsbook, 1. The billboards also prominently tout the Web site, BetUS.net.
BetUS.net greets visitors with ominous music that suggests they're entering a forum in which some will live to be winners and others will lose and perish. But the site also says its purpose is merely to teach fans how to make sports bets, using play money. One page is labeled betting 101. But there's no real betting allowed.
Online gambling is illegal in the United States. But, so far, BetUS.net is not doing anything wrong in the view of state officials.
"Now, the sister web site, BetUS.com is another deal," says Scott Stewart, a gambling regulator with the Minnesota Department of Public Safety. "That site violates federal law, the Wire Act. You can place bets on that site."
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The sister site, BetUS.com accepts bets of as much as $5,000.
So far, the dot-net site includes no mention or link to the illegal dot.com site. But both are run by the same company, LT Baroda. That's a gambling company that says it is licensed by the Costa Rican government and a Native American gaming commission near Montreal.
A company spokesman declined to comment on the billboard campaign. It's part of a broad effort to raise the company's profile. The billboards are showing up in other cities, including Boston. And BetUS also recently signed a deal --reportedly worth more than $1.3 million-- to run ads on Howard Stern's satellite radio show. Former Minnesota governor Jesse Ventura has also touted BetUS.com.
The payoff from the promotional campaign could be huge. The gaming consulting firm Christiansen Capital Advisors estimates that gambling Web sites will take in about $15 billion in revenue this year -- most of it from U.S. Citizens.
As long as BetUS.net doesn't promote sites that accept bets for real money, it's in the clear legally. At least that's the view of Anthony Cabot, an attorney with the Las Vegas law firm of Lewis and Roca.
"If the .net site is a purely educational site, does not promote the .com and there are no links from the .net to the .com, I think they have a strong legal argument that is a protected first amendment activity," says Cabot.
Policing online gambling is difficult, in part because state and national boundaries are invisible to the Internet.
Cabot says state laws are often murky when it comes to Internet gambling.
In any case, most operators of gambling Web sites are located beyond U.S. borders. Cabot says that makes it hard for federal law enforcement officials to to go after them.
Congress is now trying to block the flow of money to gambling sites. Last week Lawmakers passed legislation prohibiting the use of credit cards, checks and electronic fund transfers for online gaming. The legislation is awaiting President Bush's signature.
But Cabot expects gaming firms will find ways to thwart the feds' efforts.
"Entrepreneurs on the Internet will always stay ahead of the government," he says. "They will come up with a solution --no matter how clever or smart the government thinks it may be -- for payment processing, advertising and other things necessary to conduct the sites."
But the feds aren't helpless.
Jackie Lesh, a spokeswoman for the U.S. Justice Department says the agency remains committed to fighting online gambling. She declined to be recorded for broadcast, but said online gambling is illegal and the Justice Department will prosecute cases when evidence allows it.
Lesh noted the Justice Department is pursuing legal action against a major off-shore gaming operation, BETonSPORTS. Federal officials arrested the firm's CEO in Dallas while he was on his way to Costa Rica. And now the company says it plans to shut down gambling operations focused on the U.S.
As for the Vikings, a team spokesman says the BetUS ads are on the team's legal radar screen. But he indicated the team is planning no action for now.
