Microsoft, Google and Yahoo have agreed to pay a total of US$31.5 million to resolve claims that they promoted illegal gambling, the U.S. Department of Justice announced Wednesday.
Microsoft will pay $21 million, Google will pay $3 million and Yahoo will pay $7.5 million, the DOJ said in a news release. The three companies neither contest nor admit they promoted illegal online gambling by running advertisements for gambling Web sites between 1997 and June of this year.
The settlements stem from an investigation into illegal online gambling by U.S. Attorney Catherine Hanaway of the Eastern District of Missouri, the Federal Bureau of Investigation and the Internal Revenue Service. Hanaway's office indicted the founder of Betonsports.com, 10 other people and four companies on charges of racketeering, conspiracy and fraud in a crackdown on online gambling on June 1, 2006.Hanaway filed a new indictment against Betonsports, three other companies and 12 people on June 28 of this year.
Unregulated online gambling is illegal in the U.S., the DOJ said. The three companies were accused of procuring participants via the advertisements they ran for illegal activity. Those actions fall under the U.S. aiding and abetting statute, the agency said.
Where the Money Goes
The Microsoft settlement includes a $4.5 million fine and a $7.5 million contribution to the International Center for Missing and Exploited Children. The company also agreed to create a $9 million online advertising campaign, focused on young people, saying that online gambling is illegal under U.S. law. The campaign will run for three years, beginning in early 2008, the DOJ said.Yahoo has paid $3 million to the U.S. government, and it will provide $4.5 million worth of online advertising to a public-service campaign designed to inform users that operators and participants in online or telephone-based sports and casino-type gambling in the U.S. may be subject to arrest and prosecution."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," Hanaway said in a statement. "Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior." Google said, in a statement, that it has cooperated with the investigation. "While we did not admit any wrongdoing, the Department of Justice has advised that online gambling is illegal in the United States and ads to promote it are improper," the company said. "Google voluntarily discontinued running such ads, which were a very small part of our AdWords business, in April 2004."Yahoo said it stopped running ads for gambling sites "years ago," according to a statement. "After the U.S. Attorney's Office contacted Yahoo with its concerns, we worked cooperatively over several years to reach this settlement," the company said.Microsoft expects tp release a statement today.