Google is set to reintroduce gambling ads to Adwords, something that will quickly generate many millions in additional revenue for the search giant.

Licensed gaming operators will from tomorrow be able to buy paid search ads. Google previously allowed free games to be promoted via Adwords, but a blanket ban (of sorts, as we shall discover) came into effect in summer 2007.

Affiliate marketing blogger James Little mentioned this yesterday, after a rumour circulated around this week’s A4Uexpo in London. The rumour has been confirmed by NMA, who spoke to Google’s James Cashmore.

Cashmore said: “Dennis Woodside and the team have been reviewing policies both from a legal and user need point of view at a local level … I definitely think that local markets will make more decisions in the future.”

Google has already updated its policy. It advises as follows:

“Google AdWords allows online gambling advertisements to target Great Britain (England, Scotland, or Wales) as long as the advertiser is registered with the Gambling Commission and provides a valid operating license number. Advertisers based outside the UK and within the European Economic Area who wish to target online gambling ads to England, Scotland, or Wales must be licensed to advertise online gambling in their respective country.”

Gaming operators are advised to create a new account specifically for gambling-related campaigns (even if they already advertise with Google), and then apply by filling out a form and making various legal declarations.

Ads can only be targeted to England, Scotland and Wales. Failure to comply with this rule may result in account termination. Affiliates need to comply with these rules too, so be careful out there.

Although the new policy will open things up, there have been plenty of gambling ads on Google during the ban. A misspelling can do wonders. This can be seen today. A search on ‘online gambling’ yields no results (not for long, I suspect), but a cheeky typo makes all the difference.

Anybody who types in online gmablingwill see ads from brands such as 888, Cantor Casino, Bet 365, with ad text that leaves nothing to the imagination: “New Customers Double Your First Deposit Up to £100 – Exclusive Here”.

And it’s hardly a secret: there are 27 pages of sponsored links for the above example, so plenty of wily online marketing managers and search agencies know about this loophole. There are plenty of other gaming-related search phrases with typos that also generate ads for casinos.

So is this a recessionary move from Big G? Is the downturn starting to hit Google too? How can it not?

We’ll know more when it releases its Q3 results later today. If they’re below expectations we might see Google’s stock plummet to sub-$300, a level not seen for three years, and way off the high watermark (mid-$700s).

And if things do go awry then perhaps we can expect to see Google opening up Adwords even more. As well as the loosely-policed gambling ‘ban’, there are all kinds of other ads that Google theoretically doesn’t allow, from anabolic steroids to escort services.

However this same misspelling loophole seems to apply to all kinds of ‘banned’ advertisements, so if you want to get pumped up and make sexy time then just start typing clumsily.