The Battle to Legalize Online Gambling: July 6 Approaches

Written by:
Jenny Woo
Published on:
Joe Brennan Jr

Mark your calendars.  July 6 is an important date for the online gambling sector.  This is when a U.S. 3rd Circuit Court of Appeals is scheduled to render a decision in a case filed by The Interactive Media Entertainment & Gaming Association (iMEGA.org) against the US Justice Department in an effort to have the controversial Unlawful Internet Gaming Enforcement Act (UIGEA) repealed based on the concept that it is "Unconstitutional".

Gambling911.com's own Jenny Woo caught up with iMEGA President, Joe Brennan, Jr., to give us an update on the case.

JENNY:  On the federal front, give us the status of your appeal.  It's been reported that the judge will hear this matter in July then render a decision some time thereafter.

JOE:  Well for the UIGEA challenge, we have a date of July 6th to be in Philadelphia at the U.S. 3rd Circuit Court of Appeals.  Two things may happen at that time; one, there may be just a decision issued based on the merits of the case by the judges or they may decide on that they want to hear all oral arguments.  We'll not know exactly which it's going to be until about 10 days out from that because that's the required notice that the court is allowed to give you for this.  So we're kind of sitting on the edge right now.  Either way, we feel pretty good about things.  I think that when we did our trial level briefings, we kind of threw everything and the kitchen sink at it because nobody knew really what was going to be the best angle to take in attacking it.  Knowing that it would probably go 2 rounds at least that know matter what happened at the trial level it would be appealed.  We had to make sure that we got everything in there so that anything and everything could be a potential subject for an appeal - what they call being "preserved" for appeal.  So we've seen a lot of criticism of our initial brief.  I say it's always easier to be a critic than it is to be an author.

JENNY:  Well who were you getting the criticism from?

JOE:  It was from all over the industry.  Everything from other people in the legal community, other people in the gaming community - it came from all corners.  The thing is, you could address yourself responding to the criticism.  You know - iMEGA, we have a limit on our resources here both in time and money and the people who are committed to it.  There's only so much bandwidth that you have.  Ok well, we got that decision back from Judge Cooper where she dismissed the case but she preserved the "void for vagueness" argument that we're arguing before the 3rd Circuit Court of Appeals right now.  I think anybody who looks at what is happening since UIGEA went into effect in January -they can say, "That seems like a pretty good argument."  And since we brought on Stephen Saltzburg who was a former deputy attorney general of the United States - and it's Steven who has really drilled down on that "void for vagueness" argument which leads to over blocking.  If you remember what happened to the New Hampshire and North Dakota lotteries where even though they were given a specific exemption under UIGEA, their transactions were blocked anyway.  That's the affect of the law because Congress left it purposely vague and as a result it should be voided for that.  These institutions - the credit card companies, the banks - they can't make a determination what quote, "Unlawful Internet Gambling" is; so they'll just block it all even if it's been given an exemption.  Ask any of the guys who are running a horseracing site - what it's like getting processing.  People are blocking transactions for them even though they have a specific exemption.  So we feel like the case has gotten really strong.  I'm really anxious about July 6th.  We feel confident but I'd be lying if I didn't say that I feel a little on edge.  Haha.


JENNY:  Haha.  Of course.  But at any point have you felt frustrated?  Or has some of these set backs added fuel to the fire and make you strive even more towards your goal?

JOE:  Oh yeah.  The thing is, once you decide on strategy and once you decide on a goal - you have to keep your eye on it because (this is in anything) you're always going to have people or circumstances of what it is you're trying to do that can knock you off course.  That's one of the reasons why I've said we've tried to block out a lot of the criticism we've heard.  Haha - I just read this morning were somebody said, "Well if iMEGA's case is so good or has any chance of succeeding in federal court - why is it that nobody joined them in their suit?  Why didn't the PPA or the ITC or the bankers or anybody join their suit?"  And you know, I guess that would be a legitimate criticism.  Now - I don't think for a second that they're correct.  I don't think that because you have several groups adding their imprimatur by joining your suit necessarily makes it a stronger suit; because this is not a popularity contest.  It's a matter of law and the law is the law whether it's one person or a hundred people and that's why iMEGA chose to go this route rather than focusing our limited resources on lobbying.  We believed from the beginning that the best thing we could do with the resources we had would be to focus on challenging this law in the courts.  If we're successful against this law in the courts - well that makes worth going up on Capital Hill a whole different ballgame.  Instead of having Congressman Frank trying to push legislation that overturns the law - if we have it overturned in court then it's a situation that Congressman Frank can go back and say, "Look we tried this before.  The law failed.  Let's go about this in a common sense and rational way."  And that's it.  So we're still hopeful that that's were we're going.  It is frustrating and a lot of the people who frankly stand to benefit from this are people who seem to be all too quick to not just criticize it but almost stand against it.  I'm not quite sure where that sentiment comes from.  And I'm not talking even about people in the internet gambling community - to me - the people who suffer the most from this are the bankers and the credit card companies.  We approached them and particularly from the American Banking Association, the dismissal that they gave us was, "Well, you know we really don't want to get involved with something that may have far reaching political implications."  Even though they spend all sorts of money (haha) to lobby up on Capital Hill regarding the banking industry.  I guess in the end maybe it's for the best.  So that if the suit goes down in flames - it's not successful - there's only one party that really gets hurt by it.  If it is successful, you won't see iMEGA standing on the steps of the courthouse yelling, "I told you so" or anything like that.  These things are too important.

Jenny Woo, Gambling911.com Senior International Correspondent

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