Google, Microsoft, Yahoo Settle Gambling Charges

The companies settled with the Justice Department over claims they promoted illegal gambling by accepting ads from online betting operations.

Antone Gonsalves, Contributor

December 20, 2007

2 Min Read

Google, Microsoft, and Yahoo have agreed to pay a total of $31.5 million to settle claims by the Justice Department that the three companies promoted illegal gambling by accepting ads from online betting operations.

In the separate agreements, the three companies did not admit to any wrongdoing. The government had accused them of violating the Federal Wire Wager Act, federal wagering excise tax laws, and various states' statutes and municipal laws prohibiting gambling.

"These sums add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote-control illegal gambling enterprises," prosecutor Catherine L. Hanaway, U.S. attorney in St. Louis, said in a statement issued late Wednesday. "Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior."

Microsoft paid the most out of the trio, shelling out $21 million, including $4.5 million to the U.S. government, a $7.5 million contribution to the International Center for Missing and Exploited Children, and $9 million for a public service advertising campaign to inform teenagers and college students that online gambling is illegal in the U.S. The education campaign is to run three years starting early next year.

Yahoo settled by paying $7.5 million, including $3 million to the government and the remainder to the education campaign. Google agreed to pay $3 million to the government.

The three companies accepted advertising from online gambling operations between 1997 and 2007. The government claimed that running the ads amounted to "procuring participants for illegal activity," which violates the federal aiding and abetting law. The Internal Revenue Service and the FBI investigated the case.

Hanaway earlier this year prosecuted online gambling company BETonSPORTS, which pleaded guilty in May to violating racketeering charges. In addition, the company agreed to help prosecutors in their case against the firm's former executives. BETonSports, based in the United Kingdom, is the parent company of a network of gambling sites.

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