You Gotta Know When To Hold Em…

Last night, 60 Minutes ran a story about internet gambling. It's illegal in the United States, but offshore companies exploit the many loopholes in the legislation to get Americans to dump their cash into the gambling sites. You can read more about it or watch the segment at CBSNews.com.

The thing that struck me the most was the innovative — dare I say genius — way that these companies get around the "no advertising" rule for internet gambling. You've probably seen the ads on television for sites like PartyPoker and Sportsbook, and, like me, wondered how they could possibly be advertising legally.

The trick is that these sites, which use the .com top-level domain as the address for their primary business, also set up .net sites with the same second-level domain name.

From 60 Minutes:

Those offshore companies are so brazen, they advertise. There are banners pulled by airplanes, ads in magazines, and commercials all over cable TV. How can a cable network air an ad for an illegal activity? It's all in the fine print.

One ad was not for paradisepoker.com, where you can gamble, but for paradisepoker.net, which they call an “educational” site.

“You can play for free on those sites and learn about how to play poker,” says [World Poker Tour CEO] Lipscomb.

The .net site can advertise because there is no money involved, so it is not considered gambling. But with their identical logos and brand names, the obvious goal is to draw people from the free.net site over to the real gambling.com site.

Or, as most people do, they will see the ad, walk over to their computer, and accidentally type in the .com name instead of .net out of habit.

Regardless of how you feel about gambling, that's some savvy mindgame stuff they've got going on.