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Microsoft, Google, & Yahoo! settle on promotion of gambling

Microsoft, Google, & Yahoo! settle on promotion of gambling

Microsoft Corporation, Google and Yahoo! have entered into settlements with the U.S. to resolve claims that they promoted illegal gambling, United States Attorney Catherine L. Hanaway, of the Eastern District of Missouri announced today. The total amount of the three settlements is $31.5 million in value to the United States.

The Microsoft settlement, totaling $21 million, consists of $4.5 million to the United States and a $7.5 million contribution to the International Center for Missing and Exploited Children (ICMEC) to establish a fund to assist ICMEC with its national and international mission.

Additionally, Microsoft Corporation agrees to provide a $9 million online, public service advertising campaign to inform and educate a target audience comprised of college level or younger people that online gambling enterprises are illegal under U.S. law.

The educational advertising campaign is to run for three years, beginning in early 2008. This settlement, based on illegal conduct (which Microsoft Corporation neither contests nor admits), resolves claims that between 1997 and June 2007, Microsoft received payments from on-line gambling businesses for advertising on-line gambling.

The Google settlement of $3 million resolves claims, which they also neither contest nor admit, that they received payments from on-line gambling businesses for advertising on-line gambling between 1997 and June 2007. Procuring participants for illegal activity is unlawful under the Federal aiding and abetting statute, 18 U.S.C., Section 2.

The Yahoo! settlement of $7.5 million also resolves claims, which they neither contest nor admit, that they received payments from on-line gambling businesses for advertising on-line gambling between 1997 and December 2007. The company has now forfeited $3 million directly to the United States.

Additionally, as part of their settlement agreement, Yahoo! agrees to provide $4.5 million worth of online advertising (valued at $1.5 million per year for three consecutive years) for a public service advertising campaign.

The campaign, to begin January 2008, will be designed to inform and educate users that operators and participants in online or telephonic sports bookmaking and casino-type gambling activities doing business in the United States may be subject to arrest and prosecution.

These settlements involve corporate conduct the Government found in violation of the Federal Wire Wager Act, federal wagering excise tax laws, and various states' statutes and municipal laws prohibiting gambling. Unregulated commercial gambling is illegal throughout the United States.

"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," said Hanaway.

"Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior."

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