How “Fake News” and Coronavirus may affect I-gaming
“Bad laws are the worst sort of tyranny”
Edmund Burke
Should Internet service providers be punished if the content of a given webpage or app is deemed “harmful,” or “criminal”? It sounds like a philosophical question. But how that question is answered, or even asked, will be hugely important to the future of Internet and interactive gaming, gambling very much included.
How liable is the service provider for “bad” content? In the American system, it essentially depends on the service provider’s degree of involvement. A newspaper, for instance, can be sued if it publishes false information that causes damage. This is why they have editors. (The rule of thumb is: it’s libel if written or printed, slander if it is spoken. But today, slander can also include things like webpages and podcasts). Publishers have a duty to check for accuracy, and to avoid presenting mere opinion or conjecture as fact.
For social media the question becomes much more ticklish, because the content is generated by third parties who are not under the service provider’s control. When the Internet was first forming, it was common for “bulletin board” sites to adopt a hands-off approach. But as use of the Internet grew, so did the problems with defamatory statements, pornographic content, even criminal solicitation.
In 1996 the Communications Decency Act became U.S. law. A large part of the law, forbidding “indecent” content, was struck down by the U.S. Supreme Court on the usual grounds- there is no hard and fast definition of what “obscene” or “indecent” really means .1 Section 230 of that law (47 U.S.C. § 230) was allowed to remain. It specifically exempts Internet service providers from being held responsible for the content provided by third parties.
Without this protection, a lot of what we now see on YouTube or Yelp wouldn’t be there. The possibility of legal action would likely lead to these sites and apps censoring themselves as a precaution. This protection was held to be particularly important in regard to political speech. The freedom to speak out on public issues is the closest thing to an absolute right in the whole U.S. Constitution. This zeal in protecting political speech is the principal reason why Twitter has become almost a branch of government by itself
At the same time, Section 230 also shields service providers from civil liability for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected”. 2
Modification: how close is too close?
But in 2018, the law was modified again. The Fight Online Sex Trafficking Act (FOSTA) further limits the protection granted to online service providers. There is no protection under Section 230 for content which promotes or facilitates sex trafficking and/or prostitution. This had the desired effect. Overt sex-for- sale services like Backpage were completely knocked out, and other sites such as Craigslist deleted their “Personals” sections. But the effects went even further.
Today the social media giants such as Facebook and Instagram patrol their tweets and messages, taking down posts and even canceling access for people and groups who put out content deemed to be obscene (child pornography especially), racist or bigoted, or in violation of existing criminal and intellectual property laws. The much feared “chilling” effect has in fact come to pass. Service providers and the sites they serve are becoming increasingly self-censored.
Hold on, we’re not done yet. Even more restrictive and repressive measures are being considered. Not only is protection to be withdrawn from certain categories of content, but it has been proposed that all sites must affirmatively demonstrate they are using “best practices” to prevent trafficking and child porn.
But the restrictive and chilling effect will not be limited to “sexy” sites. Already there are plans to expand this requirement to cover such things as Air BnB’s, because mix-ups and misrepresentations can be harmful there, too.
And it’s easy to see where this is headed. If even B&B reservations are to be smashed on the off-chance someone might be injured, where does that leave online gaming, already condemned as a trap for the unwary and a beacon for evil living, generally?
Future deals?
The big difference between adult or even business sites, and online gambling sites is that at least some of the gambling sites are now licensed. So they cannot be automatically classed as criminal.
But the problem is, how far does that license protect? The U.S. would seem to be the most confused and confusing market. Because the primary reference point for American gambling law is state law, not Federal, state licenses can only support gambling activity that takes place within state borders. Very few states are allowing online gaming, even yet, and so even when states agree to share customer pools between themselves, it still doesn’t amount to much. Apart from that, it’s a state-by-state grind to get all the necessary licenses.
Outside the U.S. is not much better. Even in the EU? Yes, even in the EU. Because while the decisions of the European Commission on things like gambling are supposed to be adhered to by all members, actual execution depends on laws enacted by each member country. Which means that, depending on which format or market we are looking at, some EU countries are in compliance with liberalizing directives, and some aren’t, and are therefore technically subject to sanctions, the same as an interloper from outside Europe would be.
The rest of the world is a very mixed bag. Australia allows its residents to use online betting and casino services based outside of the country (but really wants them to buy local). South Africa likewise bans Internet gambling within its borders, but reaching outside to place a bet seems to be OK(ish) for now. China officially frowns on gambling of all kinds but does allow two government-backed lotteries and “special zone” permits in Macau and Hong Kong. Internet gambling is unlicensed and therefore presumptively illegal. But it happens anyway.
An unexpected development in this area has been the rise of quasi-gambling “games” which technically do not meet the legal description of “gambling” but use the power of digital technology to deliver action filled contests with appreciable financial rewards through techniques like alternative monetization. But their legal status is very much still up in the air.
Perhaps one day a body like the UN could put out a Section 230 of its own to protect free speech and adventurous commerce on the Internet. But right now, that day seems extremely far away. The end of the pandemic may be in sight, but it has changed everything, including the evolution and development of gaming and gambling.
Licensing jurisdictions, when they have leisure to deal with the situation again, are overwhelmingly likely to concentrate on supporting those aspects of gaming which will bring revenue and jobs back, rather than building and contributing to a wide area network. On the other hand, the widespread use of isolation and social distancing has underscored the usefulness, even the need, for transactions, financial and otherwise, which can be accomplished through remote means. We are talking about a global market, after all.
Which way will things turn out? Which trends will prevail?
Looks like a gamble. So perhaps we’re in the right business after all.
Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose, (Mary Ann Liebert Publishers, 2nd ed 2009); Associate Editor, Gaming Law Review & Economics; Contributing Editor, TSN. Comments/inquiries welcome at [email protected].
