Advertising liability issues are subject to a different analysis than the liability associated with operating an online gambling business itself. Advertisers have different, and better, constitutional arguments against the application of laws prohibiting commercial speech – even speech associated with gambling. However, a multitude of intangibles play into the risk factors associated with any particular advertising campaign. Some of these issues may work themselves through the courts in the coming years. Others will remain as unsettled variables in the analysis. Issues such as the legality of the underlying business activity and the sufficiency of the governmental interest in regulating that activity have not been conclusively resolved by the courts, but may be partially resolved through pending federal legislation. While the U.S. market is seen as a high-liability target, legalization efforts may take hold, given the shift in political power, and recognition of the potential benefits of regulation.
Online gambling is substantially different in nature and character from land-based gambling. None of the typical justifications asserted as a basis for gambling regulation, such as the infiltration by organized crime or increase in prostitution, appears to apply to online gambling operations. These differences may be exploited in future cases to convince the courts to treat the advertising of online gambling differently than traditional gambling promotion. The creativity of the industry has evidenced itself through the rise in “.net” advertising, which does not appear to be susceptible to prohibition by the government, consistent with the First Amendment. Inevitably, criminal prosecutions or civil actions will result in clarification of the law as the appellate courts wrestle with these exceedingly complex issues. Industry participants are in a unique position to influence the development of advertising law applicable to online gambling businesses, given the lack of any controlling decisions in the field.