iMEGA Lawsuit Moves Forward


Last week, it was revealed that the lawsuit between the Interactive Media Entertainment and Gaming Association (iMEGA) and the U.S. Government would resume on July 6th. The trade organization represents companies that conduct business online and is suing to declare the Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional. Last March, iMEGA was granted standing to sue by Judge Mary L. Cooper on behalf of the internet gambling industry. However, she disagreed with a bevy of arguments that the organization made, which was the impetus for the appeal. Now, the Third Circuit Court of Appeals will hear the case on July 6th.

A letter sent from the clerk of the Third Circuit to iMEGA and the U.S. Government reads, “The above-entitled case has been tentatively listed on the merits on Monday, July 6, 2009 in Philadelphia, PA. It may become necessary for the panel to move this case to another day within the week of July 6, 2009. Counsel will be notified if such a change occurs.” The Third Circuit had originally asked iMEGA about its availability in April. However, no movement occurred until last week. The case may be the “out” that the online poker world is looking for. With legislation on a national level potentially taking years to formulate, fighting the UIGEA through the judicial system may pave the way for immediate action on Capitol Hill.

The UIGEA does not state what activities are legal and illegal under it. Is playing online poker legal in the United States? What about gambling on horse racing using your Macbook? And how about rolling some virtual dice? Without clear direction from the U.S. Department of Justice, iMEGA charges that the UIGEA should be “void for vagueness.” As a case in point, Visa and MasterCard, two of the largest credit card companies in the world, have stunted online lottery purchases by residents of North Dakota and New Hampshire. Despite the fact that state lotteries have an explicit exemption from the UIGEA, these two powerful credit card companies have been among those over-blocking, trying to err on the side of caution rather than land in hot water with the law.

You’d think that the Third Circuit Court of Appeals could clearly see the inadequacies of the UIGEA, right? Think again. The over-blocking by Visa and MasterCard and the final regulations of the UIGEA are not included in iMEGA’s original brief to the Third Circuit, which was filed last November. Instead, these two developments have occurred since then. iMEGA and the Federal Government are in the midst of a spat over whether the over-blocking and UIGEA regulations should be added to the brief. The Court of Appeals will likely decide whether the record can be supplemented, although no timeline has been given.

Both sides have until the end of the week to advise the Third Circuit Court of Appeals as to who will serve as counsel for oral arguments, although these are not guaranteed to occur. By the beginning of July, the Court will notify iMEGA and the Federal Government as to when and if oral arguments will occur in the case. The parties must also state whether their counsel are members of the bar of the Court; if they aren’t, they must apply for membership.

iMEGA is also involved in the legal proceedings in Kentucky, where it is seeking to preserve the future of 141 internet gambling domain names, including those belonging to goliath Mac-friendly online poker sites PokerStars and Full Tilt. The Kentucky Court of Appeals in Louisville ruled in favor of iMEGA and the Interactive Gaming Commission (IGC) in January, a decision which was quickly appealed by the Commonwealth. iMEGA has until June 1st to file its brief in that case. The 141 websites were seized back in September and face forfeiture if the Commonwealth is successful, which would make them inaccessible around the world.

Check back to for all of the latest legal developments.


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