The Interactive Media Entertainment & Gaming Association (iMEGA) first brought its case in September of 2007, and the intent was to overturn the UIGEA on the basis of its infringement upon privacy rights and several other complaints. But after finally reaching the U.S. 3rd Circuit Court of Appeals in July of 2009, the case seems to have been defeated with a September 1st ruling that upholds the constitutionality of the UIGEA.
The initial case in the U.S. District Court found the judge dismissive of most of iMEGA’s claims, but ultimately, Judge Mary Cooper did not make a decisive ruling and suggested the case be taken to a “higher authority.” It was then that iMEGA appealed the case of iMEGA v. Attorney General of the United States, Federal Trade Commission, and Federal Reserve System that was finally heard in mid-July of this year.
On September 1st, the ruling was handed down with a decision that the UIGEA be upheld. The argument from the iMEGA attorney was two-fold; not only was the UIGEA wording vague, but any implementation of it violated the privacy rights of Americans. On the first point, the ruling stated that the UIGEA “clearly provides a person of ordinary intelligence with adequate notice of the conduct it prohibits.” And on the second point, the citations provided by iMEGA regarding privacy rights were “misplaced” and not applicable in this case.
However, the judges were able to clarify some points about the UIGEA that may prove helpful in other cases or in another appeal for iMEGA. First, Judge Dolores Sloviter noted, “It bears repeating that the Act itself does not make any gambling activity illegal.” She also spelled out that state laws override the UIGEA. “Whether the transaction…constititues unlawful Internet gambling turns on how the law of the state from which the bettor initiates the best would treat that bet, i.e. if it is illegal under that state’s law, it constitutes ‘unlawful Internet gambling’ under the Act.”
The reaction from iMEGA came in the form of a statement from Chairman Joe Brennan, Jr.: The court made it clear - gambling on the Internet is unlawful where state law says so. But there are only a half-dozen states which have laws against Internet gambling, leaving 44 states where it is potentially lawful. It’s not perfect, but it’s a good start… States have always held the power to regulate gambling in this country, not the Federal government. The court’s ruling seems to say ‘back to the future’ when it comes to regulating Internet gambling, so we will turn out attention to the states to make the case that this industry can be properly regulated and produce badly needed tax revenue.”
With that, the non-profit iMEGA is currently looking into a review of the ruling to assess the possibilities for another appeal.