On Tuesday, the Interactive Media Entertainment and Gaming Association (iMEGA), which is suing to declare the Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional, learned that the U.S. Department of Justice (DOJ) denied its request to supplement the record. iMEGA had petitioned to include the complications arising in the New Hampshire and North Dakota state lotteries.
An article that appeared in the Union Leader newspaper in the Northeastern state of New Hampshire noted that a reclassification of lottery purchases by credit card companies caused many of their customers’ transactions to be denied. The newspaper explains that such “sales used to be filed under ‘government service’ by the big card makers, Visa and MasterCard.” Lottery sales in New Hampshire have been down overall given the economy; customers experiencing headaches in order to purchase online subscriptions are undoubtedly exacerbating the issue. A similar issue has also occurred in North Dakota.
In Illinois, lawmakers in the home state of new U.S. President Barack Obama are investigating selling lottery tickets or subscriptions online. However, an Associated Press article also notes that complications are arising from “card companies classifying the subscriptions as a gambling purchase instead of a government service, triggering additional fees and red tape for customers [in other states].” Illinois also has legalized riverboat gambling.
iMEGA Chairman Joe Brennan told Poker News Daily that, as a matter of professional courtesy, it’s customary to ask the other party involved in a legal suit before adding material to the record. Nicholas Bagley, Attorney for the Civil Division of the DOJ, told iMEGA on Monday that the U.S. Government would not give its consent for the additions. Now, the organization must file a motion to the Third Circuit Court of Appeals.
Brennan explained, “It’s ridiculous because this deals with the real-world impact of the UIGEA. I’m not surprised, though, because this inclusion makes our case for us. Visa and MasterCard have, in their new operating rules, stated that they’re going to over-block lottery transactions even though there is a carve-out in the UIGEA for state lotteries.” iMEGA charges that the UIGEA should be “void for vagueness,” exemplified by Visa and MasterCard’s actions.
The UIGEA’s regulations went into effect on January 19th, 2009. The entire financial services industry, which is in the midst of the worst economy in 80 years, must come into full compliance by December 1st. The regulations of the UIGEA were passed as “midnight rules” by the outgoing Bush Administration. iMEGA’s fight to declare the UIGEA unconstitutional began with the organization being granted standing by Judge Mary L. Cooper of the U.S. District Court of New Jersey last March. In the process, she also disagreed with many of the trade organization’s main points. iMEGA subsequently appealed to the Third Circuit.
Brennan told Poker News Daily that the ability to add evidence to the record hinges on whether “that there has been a change in the rule.” In this case, iMEGA’s brief to the Third Circuit was filed on November 13th, about two weeks prior to the final regulations of the UIGEA being unveiled. In January, the U.S. Supreme Court announced that it would not review the Child Online Protection Act (COPA). An Appeals Court stated that technological filters would be sufficient to “protect children from inappropriate content online,” according to the Associated Press, a notion that the Supreme Court agreed with. Brennan summarized, “All of this has occurred since we filed our brief, so of course the Third Circuit would want to consider it. It clearly falls within the definition of supplementing the record.”
iMEGA is also a leading party in a lawsuit involving 141 internet gambling domain names in the Commonwealth of Kentucky. In January, a three judge Court of Appeals panel ruled by a two to one margin that domain names do not constitute “gambling devices” as outlined by Kentucky state law and therefore could not be seized. The State announced its appeal and filed a brief with its Supreme Court. Kentucky’s attorneys had originally asked for 30 more pages in its brief or 10 days to pare it down to the customary 50. The State filed a 56 page brief (64 with the Table of Contents and headers) before the Court responded. Now, it awaits word whether it will have to adjust the length of its brief.
Brennan commented, “This gives us more time to pull brief apart until the Court rules on it.” iMEGA does not have to file a response until the State’s brief is approved.
