Tuesday, Aug. 17, 2004 | 9:06 a.m.
NEW ORLEANS -- The operator of a gambling news site on the Internet has asked a federal judge to declare that advertisements in U.S. media for foreign online casinos and sports betting outlets are protected by free-speech rights.
The suit, filed by Louisiana-based Casino City Inc. in Baton Rouge federal court, challenges subpoenas sent by the Justice Department to media outlets for records dealing with the purchase of ads for offshore gambling sites.
Online casinos and sports betting books are not legal in the United States, but operations in locales such as the Caribbean have sprung up widely in recent years with U.S. residents making bets through credit card transactions.
The suit by Casino City, which operates a Web site featuring news about casinos and sports books but does not offer wagering, contends that the Justice Department action has "had a chilling effect upon free speech." The government action also caused The History Channel to cancel a promotional collaboration with Casino City, CEO Michael Corfman said.
The suit contends that the Justice Department also has warned major media trade groups, such as the National Association of Broadcasters, that running such ads may subject a media outlet to criminal prosecution under the 1961 Wire Communications Act, which was written to cover sports betting by telephone.
A number of major Internet portals recently stopped accepting ads for online casinos and sports books.
Corfman said his company lost business with a cable television network and a mainstream casino after "their lawyers nixed the arrangement because of our involvement with online gaming."
Much of Casino City's revenue comes from ads for online gambling services, the suit said.
The company said that since the ads are for Internet operations that are legal in the countries where they operate, the ads running in the United States should be fully covered by the First Amendment as an "exercise of free expression."
The Justice Department declined to comment.
The suit was filed last week. No hearing date has been set.