Gambling lawsuit filed against top websites

A handful of leading online content providers, including Yahoo and Google, have been served with a class action lawsuit in the US for accepting advertisements for illegal internet gambling, law firms that filed the suit say.

The lawsuit alleges that the companies are accepting money to promote illegal internet gambling sites on their search engines through paid or sponsored entries.

The lawsuit, filed in the Superior Court of the State of California, names as defendants Yahoo, Google, Overture, Ask Jeeves, Looksmart, CNet, Altavista, Terra Lycos, Jupitermedia, FindWhat.com, Kanoodle.com, Business.com and Sex.com.

A spokeswoman for Yahoo says the company won't comment on pending litigation, but adds "Yahoo, nor Overture, nor Altavista, nor any other Yahoo network [property] accepts paid listings for online gambling".

Lycos, Ask Jeeves and Grant Media, which owns Sex.com, also declined to comment. Scott Reinke, associate corporate counsel at FindWhat.com, says his company has not received any notice of a class action suit and also had no comment. Calls placed to the other defendants weren't immediately returned.

Internet gambling companies are prepared to pay highly to get sales leads from these search engines, the lawsuit alleges.

"Under the search term 'internet gambling,' the highest price per lead was an astounding US$12.97 per click-through. ... The next four highest price click-throughs (also gambling sites) were all at or above $12 per click-through," the lawsuit says.

The lawsuit states: "The defendants conspired with the internet gambling websites to create and provide internet advertisements to areas such as California in which internet gambling is illegal with the knowledge and intention of persuading and directing California residents to visit these illegal gambling websites so as to illegally gamble in California."

The lawsuit alleges that internet gambling sites avoid a 15-percent tax on gambling revenue which would otherwise go to the state coffers, and also that internet gambling deprives California's indigenous Indian tribes of revenue from gambling which was guaranteed to them under a deal signed on June 21 with California Governor Arnold Schwarzenegger.

Ratifying that deal, Schwarzenegger said: "The new agreement respects the tribes' sovereignty. It protects their exclusive gaming rights and it begins a new financial partnership between the tribes, local communities and the great state of California."

The lawsuit asks for a permanent injunction against the alleged wrongdoing and for "restitution ... for all illegal gambling proceeds" received by the defendants "and/or the internet gambling operations," including state taxes and fees.

The suit was filed by the law offices of Lerach Coughlin Stoia Geller Rudman & Robbins in San Francisco and San Diego, and The Rothken Law Firm of San Rafael, California.