Legal Challenge to UIGEA Rejected

Disappointing news for those holding out hope that iMEGA’s challenge to the UIGEA would prove successful in halting implementation of the law: The US 3rd Circuit Court of Appeals rejected a challenge to the law by the Interactive Media Entertainment & Gaming Association (iMEGA).

iMGEA mounted a case based on two planks: that the UIGEA was too vague as written and that the law threatened individual rights to privacy. The Court rejected those arguments but did clarify a point that several people have had trouble understanding - namely, that the UIGEA does not make gambling online illegal. A quote from the decision make that point decisively clear:

“It bears repeating that the Act itself does not make any gambling activity illegal,” wrote Judge Dolores 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.”

So, in essence, the Court basically said that existent state law is the final word regarding online gambling, a fact that iMEGA chairman Joe Brennan Jr. cited as cause for optimism in a statement following the ruling: “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.”

Read the full text of the decision here.