ederal law enforcement officials have recently begun to pursue a different tactic in their efforts to crack down on Internet gambling. It's one that could have implications for any business whose products or services are used by the companies who operate electronic betting sites.

Federal agencies routinely seize money from people and companies if there is reason for them to associate the funds with crimes including drug dealing and terrorism. They now appear to be adding online gambling to that list of qualifying criminal activities.

On April 6, 2004, U.S. Marshals seized money from cable broadcaster Discovery Networks that it had received as payment for advertising from an online casino operator based in Costa Rica, The New York Times reported. Legal experts are debating the legitimacy of the seizure, saying that despite the government's assertions, the illegality of online gambling has not been established. It's still not clear whether online casinos are violating any federal laws, including the Wire Act.

In October 2003, Tropical Paradise bought $3.5 million worth of advertising on Discovery's Travel Channel during its broadcast of the "World Poker Tour." The company also paid $350,000 to advertise on Discovery's Web site.

Most of the ads didn't run because Discovery learned of the government's stance on advertising offshore gambling. Tropical Paradise filed suit for breach of contract because it never received a refund for the unaired ads. Discovery said it doesn't have the money to give back because the government seized it.

Because companies would be "aiding and abetting" the illegal operations, this could potentially mean that any proceeds an American company makes doing business with an offshore casino could be taken. Software providers, consultants, broadcasters and Web portals would all be subject to seizure—and fines.

Last year, PayPal, owned by eBay, Inc., was fined $10 million for processing transactions for offshore online gambling companies over a year-and-a-half period ending November 2002. This amount was based on revenue PayPal earned on the transactions; online gambling was expected to be a $6 billion industry in 2003.