UIGEA Upheld by US Court

Sad news for online gamblers in the US this week as the 3rd Circuit Court upholds the Unlawful Internet Gambling Enforcement Act, rejecting the argument that the law is unconstitutional and should be repealed. The case was brought back to the court by The Interactive Media Entertainment and Gaming Association (IMEGA), who say they are considering filing an appeal.

While the decision is seen as a blow to poker advocates who hoped this case could initiate the immediate removal of a law that severely hampers the online gaming industry, IMEGA chairman Joe Brennan, Jr. believes that this ruling does open the door for the potential regulation of legalized poker in the U.S.

“The court made it clear — gambling on the Internet is unlawful where state law says so,” said Brennan. “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.”

While the court’s decision does not effectively change anything, Brennan believes the language of the judges’ opinion will relieve states’ concerns that legalizing and regulating online poker in their own states is somehow illegal under the Wire Act. While Brennan and other gambling and legal experts have argued that the Wire Act only applies to sports betting, the Department of Justice has maintained that online poker is illegal.

Judge Dolores Sloviter, the judge who wrote the opinion in the third circuit court, made it clear that the UIGEA could not be used to support the Department of Justice’s position.
“It bears repeating that the Act itself does not make any gambling activity illegal,” wrote Sloviter. “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.”

While Brennan expressed disappointment that the court didn’t agree with the arguments that his organization presented — that the UIGEA was unconstitutional due to vagueness, privacy concerns, first amendment issues, and because it was counter to U.S. treaty obligations — he said that, in a way, “this levels the playing field.”

With the focus now on the individual states, IMEGA hopes to spend its time and resources on local issues to try to regulate the industry.

“States have always held the power to regulate gambling in this country, not the Federal government” said Brennan. “The court’s ruling seems to say ‘back to the future’ when it comes to regulating Internet gambling, so we will turn our attention to the states to make.

News Added: 08 September, 2009

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