Microsoft, Google, Yahoo Pay up on Gambling Fines

WASHINGTON — Microsoft Corp, Google Inc and Yahoo Inc agreed to a settlement worth $31.5 million to resolve accusations that the companies promoted illegal Internet gambling, the Justice Department said on Wednesday.

The companies were accused of receiving money from online gambling businesses to advertise illegal betting from 1997 through 2007.

As part of the settlement, the companies will pay cash to the U.S. government and provide millions of dollars worth of public service advertisements informing young adults and teenagers that Internet gambling is illegal.

U.S. Attorney Catherine Hanaway in St. Louis, Missouri, who prosecuted online gambling company BETonSPORTS Plc earlier this year, announced the settlement.

“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 operations,” Hanaway said in a statement.

Microsoft will pay $4.5 million to the U.S. government, $7.5 million to the International Center for Missing and Exploited Children, and provide $9 million worth of public service advertising.

David Bowermaster, a Microsoft spokesman, said that Microsoft stopped accepting ads from online gambling sites nearly four years ago. “This agreement reflects our ongoing commitment to online safety,” he said.

Yahoo’s settlement of $7.5 million includes forfeiting $3 million to the U.S. government and providing $4.5 million worth of online ads for a public service advertising campaign. Google will pay $3 million, the department said.

The United States made it illegal in October 2006 for credit card companies to accept charges for online gambling, effectively closing the market to foreign companies. Many are based in Europe, such as 888 Holdings, PartyGaming and Sportingbet Plc.

As part of a U.S. crackdown on Internet gambling, two founders of payments processor NETeller Plc were arrested in January. In May, BETonSPORTS pleaded guilty to U.S. racketeering charges and agreed to cooperate in a case against the company’s founder and other co-defendants.

On Monday, the European Commission accepted a U.S. offer to open U.S. markets for courier services, storage and warehouses in exchange for Europe dropping its fight for compensation for closing the U.S. gambling market to foreign firms.

PartyGaming, bwin Interactive Entertainment and other European firms had hoped the European Commission would fight on. U.S. restrictions on online gaming wiped out billions of dollars of the European firms’ market value.

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