Judge gives iMEGA case mixed results

Mt. Rushmore

A ruling was issued Thursday in the Interactive Media Entertainment & Gaming Association's lawsuit against the Unlawful Internet Gambling Enforcement Act, after four months of waiting.

U.S. District Judge Mary Cooper dismissed the organization's challenge of the ban in her ruling, but she did give the group legal standing to challenge the law in an appellate court.

The UIGEA is designed to stop online gambling by preventing the electronic processing of money from financial institutions and credit cards to or from online gambling sites. iMEGA was arguing that the law was unconstitutional on many fronts, including invasion of privacy and freedom of speech concerns.

Judge Cooper dismissed the constitutional challenges to the UIGEA, finding that the law had been legally enacted and doesn't violate the Constitution.

"The plaintiff's claims express a fundamental disagreement with Congress' judgment that Internet gambling should be controlled legislatively, and pose questions as to whether UIGEA, given its exceptions and conjectural enforcement problems, will be successful in accomplishing its desired ends. But it is not the Court's role to pass on the wisdom of a Congressional act or speculate as to its effectiveness," Judge Cooper wrote in her conclusion.

"The Court has determined that the challenged statute was lawfully enacted and does not impermissibly intrude on the Constitution's guarantees."

iMEGA had also argued that the new law is contrary to the World Trade Organization's decision that U.S. online gambling ban laws were in violation of trade agreements it had made through the WTO.

Judge Cooper dismissed that argument as well, saying it was a challenge that may be brought only by the government itself, not by an individual or private group.

However, iMEGA was granted legal standing as an association acting on behalf its members who could potentially be affected by the UIGEA being implemented. This allows the organization to continue an appeal or possibly file a new action against the law on different grounds.

"Granting iMEGA standing is a major victory any way you look at it," said Eric M. Bernstein, Esq., attorney for iMEGA. "Judge Cooper's ruling holds that, even with the passage of UIGEA, online gambling is only illegal in states where a statute specifically says it is."

Joe Brennan Jr., iMEGA chairman, also expressed the organization's satisfaction with the court ruling despite the fact that the majority of its charges were dismissed.

"Judge Cooper found that banks, credit card companies and other payment system instruments are exempt from criminal sanctions under UIGEA, significantly undercutting UIGEA's enforcement mechanism," Brennan said. "Her ruling echoes the growing consensus of opinion that UIGEA is a fundamentally flawed statute."

The organization does plan to appeal the decision, according to Bernstein.

"We believe Judge Cooper missed the opportunity to affirm Americans' online privacy rights and we plan to appeal to the Third Circuit Court of Appeals," Bernstein said. "However, her honor's decision significantly undercuts the federal government's argument that UIGEA is a well-drafted, effective and enforceable law."

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