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Lerach Coughlin Stoia & Robbins has brought a new level of risk to the business of Internet search. The plaintiffs firm filed a class action against Yahoo Inc., Google Inc. and 10 other Internet search engines that claims they have been promoting illegal gambling on their Web sites and requests that they fork over the ad revenue. The complaint, filed Tuesday in San Francisco Superior Court, requests that the search engines put revenue from advertising Internet gambling into a fund that would provide restitution to California Indian Tribes or other licensed gambling businesses in California. The complaint says money in the fund would also go to the spouses of gamblers who have had community property taken away as a result of illegal gambling and to the state treasury. The plaintiffs also seek a preliminary injunction from the court. “We’re trying to stop the search engines from sponsoring or advertising Internet gambling,” said Reed Kathrein, a partner at Lerach Coughlin’s San Francisco office who is representing the plaintiffs. “People have come to us and asked ‘How can they get away with this?’” The complaint cites Yahoo’s and Google’s advertising revenue but it does not specify how much was derived specifically from Internet gambling advertisements. The complaint cites a General Accounting Office report that shows that Internet gambling operators pulled in approximately $5 billion from 1,800 sites last year. The complaint says the California Business and Professions Code prohibits unregulated gambling. Yahoo, Google, Ask Jeeves Inc., CNet Networks Inc., AltaVista Inc. and the other defendants “actively and knowingly promote, advertise and facilitate illegal Internet gambling by providing advertising” for these businesses, the complaint says. Kathrein said this was the first suit filed against search engines for their involvement in Internet gambling. Several suits have been filed against credit card companies for processing gambling transactions. The Lerach firm has not been involved in those cases. But Ira Rothken, a solo practitioner in San Rafael, Calif., who is co-counsel in the search engine suit, has similar suits against the credit card industry. Rothken said that in Marino v. American Express, the credit card company and Discover agreed several years ago not to give merchant accounts to Internet casinos for processing transactions in the United States. In another case pending in San Francisco federal court, Retailers National Bank v. Harding, a couple claims that because it is against California public policy to provide loans for gambling, the bank should not have the right to collect debt on such loans. Cisneros v. Yahoo, 04433518, requests compensation for plaintiffs for the four-year period prior to the filing of the complaint. The suit notes that one of the plaintiffs lost more than $100,000 gambling in California. Yahoo, Google, Ask Jeeves and CNet could not be immediately reached for comment Tuesday.

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