It has been over a year since the Interactive Media Entertainment & Gaming Association (iMEGA) began their legal crusade against the Unlawful Internet Gambling Enforcement Act (UIGEA). They faced off against the U.S. Department of Justice over an extended series of appeals, which have now culminated in this final ruling. Sadly, the U.S. Third Circuit Court of Appeals came down against the gambling industry group, rejecting their claims that the UIGEA should be void for vagueness. The loss was tinged with some hope, as the judge’s comments about the application of the UIGEA leave some hope for legal US online poker in the near future.
A three judge panel had spent the last few weeks deliberating their decision in this final appeal. The New Jersey court eventually concluded that the UIGEA, which bars banks from processing online gambling transactions, was not so vague as to be unworkable. The decision arrived shortly before the bill is due to come into effect in December. iMEGA had also argued that the UIGEA constituted an invasion of privacy and this was also rejected.
Despite the loss, Judge Dolores Silver was keen to point out that the UIGEA did not make online gambling itself illegal. “Whether the transaction…constitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e. if it is illegal under that state’s law, it constitutes ‘unlawful Internet gambling’ under the Act.” The judge appears to be stating that online gambling would only be illegal in states where the law specifically forbids it.
Vocal iMEGA chairman Joe Brennan Jr. was quick to highlight this ray of hope in the face of defeat. “If you go by that reasoning, if it’s not illegal in that state, then it would not be a violation of federal law to process a transaction from a player there.” This dependence upon state law is a result of midnight rulings pushed through in the dying days of the Bush administration. In an attempt to address the vague meaning of ‘unlawful online gambling’ that the UIGEA depends on, the companion bill deferred the definition to state law. “There are only a half-dozen states which have laws against Internet gambling, leaving 44 states where it is potentially lawful,” Brennan added.
Although Brennan did hit that the group was considering mounting another appeal, this latest ruling carries a ring of finality. In the face of the judge’s statements, iMEGA is now resolved to concentrate on petitioning state officials to get online gambling officially legalized. Brennan and his cohorts want to make clear the legislative bodies that “this industry can be properly regulated and produce badly needed tax revenue.”
The UIGEA is currently due to go into effect in December, with preparatory rumblings already emerging from some banks. The rulings clarifications do leave some room for hope, as particular states may be able to opt out of the ban by officially declaring online poker legal. Despite iMEGA’s failure to crush the UIGEA outright, the work of Frank and Menendez in Washington may see online poker legalized outside the courts in the near future.