As part of the ongoing battle against the online gambling industry, the United States Department of Justice started a grand jury investigation into the efforts of American media companies, including major Web search engines, which publish or broadcast advertisements for offshore casinos. Official U.S. Government policy opposes online gambling, maintaining that the offshore operations are illegal. Prosecutors for the Department of Justice argue that, because these offshore gambling operations are illegal, advertisements for these operations are illegal as well.

Some legal experts take issue with this argument, however, noting that it has not yet been clarified that federal law prohibits all forms of online gambling, making the question of legality regarding the advertisements mute. Some experts also argue, that even if online gambling was clearly illegal, the right to advertise online gambling sites is just as clearly protected by the Constitution because of the right to commercial speech.

It is this last argument that prompted Casino City Inc., which operates online Casino directory, CasinoCity.com, to file a lawsuit charging that the U.S. Department of Justice is in violation of constitutionally protected free speech. Lawyers for Casino City argue that the DOJ violates the right to free speech when it threatens American publishers with criminal penalties if they broadcast, display, or print advertisements for gambling websites.

In the lawsuit, filed August 9 th, Casino City Inc. is asking the court to issue a declaratory ruling that online casino advertisements are constitutionally protected free speech. Casino City, based in Baton Rouge, La, derives revenue from its advertisements for offshore casinos. Even though the casinos advertised are not legal or licensed within the United States, they are licensed and completely legal overseas.

A lawyer for Casino City, Barry Richard, who also represented President Bush before the Florida Supreme Court during the 2000 election dispute, said that advertisements for offshore casinos deserve the same constitutional protection that advertisements in a national magazine for a casino in Las Vegas deserve. For example, even though Las Vegas casinos are not licensed to operate in Californian, advertisements in California for Las Vegas casinos are not illegal.

No doubt, offshore casinos are closely monitoring the lawsuit, as the results will have significant consequences for their businesses. Most Internet gambling sites get at least half of their customers from the United States and the inability to advertise there would seriously impact their ability to garner more customers and retain their existing customers. The ruling will also have a serious impact on other media companies presently advertising offshore casinos or considering doing so. Already several major broadcasters, including the radio giants Clear Channel Communications and Infinity Broadcasting and Discovery Networks of cable television no longer agree to advertise offshore casinos.