On September 29th, the Interactive Media Entertainment and Gaming Association (iMEGA) filed an appeal with the Third Circuit Court in a case to declare the Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional. This week, the U.S. Department of Justice filed its response with the Court. iMEGA now has 15 days to prepare a brief addressing the government’s document. Then, a three judge appeals panel will decide the future of the case surrounding the UIGEA, which was passed in October of 2006.
The response by the Federal Government attacks iMEGA’s assertion that the UIGEA is vague. The response by the Department of Justice reads, “The Act is in any event perfectly clear: It prohibits the knowing acceptance of financial instruments in connection with gambling when the bet in question is illegal in the place it was made or received.”
iMEGA Chairman Joe Brennan commented in a press release posted on the organization’s website, “We’re very confident, after reviewing the government’s brief, that we are on track for having this law overturned. We’re looking forward to the opportunity, once this fatally flawed law has been dealt with, to work toward a reasonable, common sense approach by our country to Internet gaming, one that above all affirms our rights and their place in the online world.”
The lack of clarity as to what the term “internet gambling” means as it relates to the UIGEA has been the subject of a crusade by Congressman Barney Frank (D-MA), Chairman of the House Financial Services Committee. The Payments System Protection Act (HR 6870) and an accompanying amendment require that a list of activities be developed, including what is and is not legal under the law to make the UIGEA’s enforcement by the financial services industry straight-forward. As it currently stands, for example, industry experts may argue that online wagering on horse racing is legal in the United States, yet Frank stated in a Committee hearing that the answer ultimately depended on “which department you asked.” HR 6870 was passed out of Committee in early October.
The government’s brief asserts that iMEGA lacks standing to charge that the UIGEA violates privacy rights of individuals. In addition, the document claims that iMEGA cannot claim that the UIGEA is unconstitutionally vague because the organization “failed to advance this argument to the district court, either in its motion for injunctive relief or in its opposition to the government’s motion to dismiss.” Brennan added, “It’s hard to believe the government is making that claim, when Judge Mary Cooper herself preserved due process concerns in her decision.” The Third Circuit covers parts of Delaware, New Jersey, Pennsylvania, and New York.
Meanwhile, iMEGA and other organizations are squaring off against the Kentucky Justice and Public Safety Cabinet in Kentucky over the seizure and potential forfeiture of 141 internet gambling domain names, including those belonging to some of the world’s largest online poker rooms. The legal activities in the Commonwealth came after its Governor, Steve Beshear, ordered the seizure of the domain names, in his words, in order to “protect our people, especially our children, from this illegal and unregulated activity while also protecting our legal and regulated forms of gaming in Kentucky.”
iMEGA does not expect any complications arising from wagering legal battles on two different fronts. The Interactive Gaming Council (IGC) has also been heavily involved in Kentucky. Both the IGC and iMEGA recently filed petitions to the Kentucky Court of Appeals to intervene.
