Internet Firm To Pay Millions In Law Suit

Posted:09.01.2008, 02:27

[Internet Firms To Pay Millions In Suit

SOURCE: St. Louis Post-Dispatch

Three of the largest Internet companies have agreed to pay millions in fines and stop accepting online gaming ads, the U.S. Attorney's

office announced today.

As part of the $31.5 million settlement, Microsoft, Google and Yahoo did not admit or deny federal prosecutors' claims that as much as a

decade of the advertising aided and abetted a crime – online gaming.

U.S. Attorney Catherine Hanaway said that the settlement ends years of investigative work and 12 to 17 months of negotiations with the

companies, and brings the total of Internet gaming-related settlements reached with the St. Louis office to $70 million.

One of the specialties of Hanway's office is the fight against online gaming.

Her office recently reached civil and criminal settlements with BetOnSports, once one of the largest online gaming companies, that has

shuttered the company.

The case against company employees, officers and others is still open, however.

Google agreed to pay $3 million cash.

Microsoft agreed to pay $4.5 million to the U.S., plus $7.5 million to the International Center for Missing and Exploited Children and $9

million to fund a three-year public service ad campaign aimed at educating users that online gambling is illegal.

Yahoo agreed to pay $3 million and run their own $4.5 million, three-year ad campaign.

PartyGaming May Have to Pay US$20 Mil

Publicly traded online poker firm, PartyGaming, may end up paying the US government $20 million, assuming US officials plan on being especially generous. That number is based solely on Party's $138.9m in 2006 pre-tax profits and discounts the previous few years it accepted bets from US citizens. The number is also based on the US government wanting 15 per cent back in tax monies.

PartyGaming has openly disclosed that they are working to settle any monetary issues with the United States. As such, it was revealed that few companies wish to deal with the one time largest online poker venture when it comes to partnership deals and potential acquisitions.

For years, Party siphoned millions of dollars out of the US economy. 80 per cent of its customer base resided in the US. By attempting to settle with the US Government, they have essentially placed their heads on the chopping block. We can use the reformed bank robber wanting to pay back the bank analogy here but we won't.

Party at one time was one of the biggest supporters of lobbyists in Washington looking to regulate online gaming prior to the passage of the Unlawful Internet Gaming Enforcement Act over a year ago. They immediately scrambled out of the US market but still remain a viable enterprise (the number three online poker room in fact).

Both US and foreign companies cut their taxes by profit shifting, but many lawmakers and tax analysts believe the practice is particularly widespread among foreign companies. More than 70 percent of foreign firms paid no tax each year between 1987 and 1991, the IRS reports, compared to about 60 percent of US companies. Clearly, some paid no tax because they did not make a profit, but many lawmakers believe others are illegally shifting profits overseas.

PartyGaming, while operating from the shores of Gibraltar, did have US citizens running the company at one time.

Search engine giant, Google, was recently ordered to pay $31.5 million just for promoting online gaming companies.

Posted:09.01.2008, 05:19

I wish they would leave our rights and freedom alone! I love the USA but some people just can't stand it when we're having a good time!

Posted:09.01.2008, 12:38

In my opinion, the biggest problem the government has against online gambling is that they are not getting a cut. Since the places we gamble at are primarily overseas, we do not pay taxes on our winnings and the casinos do not pay the US taxes on our losses (deposits).

I feel like I should be able to choose where I spend my money. I do gamble at land-based casinos in the US, however I still want freedom to choose to deposit $50 online and be able to enjoy the fun I get from playing slots without driving to a land-based casino.

It's annoying, and the way I see it, pure greed. We're already taxed on everything from socks to our houses and cars. We work...and have to pay taxes on what we earn. Then, the money we have leftover is used to make purchases: utilities, mortgages, car notes, toiletries, etc - which are all taxed. My kids go to public school, and where I live, the school taxes are very high. TAXES, TAXES, TAXES!!!

And, taxes [$$$$$$] is what the government is all bent out of shape about when it comes to online gambling! I'm just sick of it all.

Posted:09.01.2008, 15:34

Microsoft is agreeing to pay to educate us that online gaming is illegal??
Where does it say that? Does that also mean it is illegal to play games
such as Pogo, or a dozen other places you can play for $$$$
Could someone smarter than me, tell me where the law is that
I should know it is illegal !! I won't do it if it is not legal!!!
HELP

Posted:09.01.2008, 15:37

They say it is illegal in... the Unlawful Internet Gaming Enforcement Act, But its a crock as posted above the Gov. is just pissed cuz they aren't getting there cut!