Editorial: U.S. shops must fold on gaming

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Madison Avenue forever defends marketing of consumer vices with a strong argument: We're promoting a legal product. That doesn't fly for the booming ad category of online gambling. The U.S. government says Net gambling is illegal. Banks refuse to process the transactions. EBay's PayPal paid $10 million to settle claims it violated the Patriot Act by working with gambling sites. It's time for agencies-and media-to come clean.

MDC Partners hit the issue head on: "U.S. federal laws clearly prohibit online gambling within the U.S., whether or not such operations are based offshore. Further, any person or entity that aids or assists in such operations is punishable as a principal violator of these laws. Therefore, no MDC Partners agency should represent any client engaged in these unlawful activities."

Omnicom Group also prohibits online gambling. "To the extent [Omnicom] companies want to pursue such business, we're telling them they can't," a spokeswoman says.

But other holding companies didn't fully answer questions about whether they will let their agencies pursue these accounts.

Interpublic Group says online gambling falls into an existing policy: "All marketing communications or services must be prepared in compliance with local customs and laws regulating marketing communications or services." So is the answer yes or no? Apparently yes: One of its agencies, Avrett Free & Ginsberg, has been in two reviews this year for offshore-gaming accounts.

WPP Group referred to a "Corporate Social Responsibility Report" that says it "will comply with all applicable local laws and regulations." But it wouldn't say if online gaming is on- or off-limits for U.S. shops. Publicis Groupe and Havas by deadline hadn't responded to questions.

Gaming venture 888.com, now seeking a U.S. shop, is eyeing a stock sale in the U.K., where online gambling is legal. PartyGaming has a $10 billion market cap after a U.K. IPO last month; it gets 87% of revenue from the U.S. Online gambling is popular; so is prostitution. Both are illegal here. Unless courts or Congress decree online gambling legal, shops have no business playing.

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