Gaming Affiliate Risk?

by , Aug 2, 2012 | 6:39 am

Last month I became aware of actions taken against an Internet gaming affiliate by the US Attorney in the Southern District of Ohio. The offences being investigated apparently include violations of the Travel Act, the Illegal Gambling Business Act, 18 U.S.C. § 1957 (transacting in property derived from specified unlawful activity), and tax evasion. At this early stage, not enough facts are available to reach any conclusions about what it all means, but there are already a couple of interesting observations to make.

The first is that this type of action is being taken against an affiliate at all. I’m not aware of any previous federal case where an i-gaming affiliate was specifically targeted as part of a criminal investigation. There have been some actions as against advertisers before, e.g., The Sporting News settlement with the DOJ in 2006 and the 2007 resolution of promotion of illegal gambling claims by Yahoo!, Microsoft, and Google. There was also the Casino City case in 2004 in Louisiana. But none of those cases involved criminal indictments by federal authorities against specific affiliate marketers. This could be a new approach by federal prosecutors.

The second is that the Wire Act appears nowhere in this action, or at least not in documents I’ve seen thus far. This seems consistent with the DOJ’s pull-back on applying 18 U.S.C. 1084 in certain gaming prosecutions. This case appears to rest on federal provisions based on alleged predicate Ohio state law violations.

Again, it’s too early for firm answers, and law enforcement in the United States is so diffuse that it’s difficult to reach generalized conclusions, anyway. But this is something of which US-facing affiliate marketing sites and their principals will want to take note.

2 Comments to “Gaming Affiliate Risk?”

  1. Dan Michalski

    the Calvin Ayre indictment talks about a media partner in ways that seem more co-conspirator than anything else.

    though the DOJ’s most recent decision has baffled me on many fronts, i did believe one key goal was to get all the money from people who scored big in Stars/Tilt/UB business … particularly if they were directly involved in the rake.

  2. Stu Hoegner

    I remember you mentioning that aspect of the Ayre indictment previously — well-spotted, Dan.
    In some senses, it’s difficult to read the tea leaves on how the Maryland US Attorney will proceed. It’s not clear whether more will come out of that prosecution or the Thrill-X indictment, for example. What does seem clear to me, however, is that the DOJ has effectively reserved its rights to pursue sundry folks profiting from Internet gaming websites, affiliates included. (I suppose may seem a trite statement along the lines of “US Attorneys will go after those they allege are committing criminal acts.” The novelty seems to be in the expanding universe of specific investigative targets of the DOJ.)