3rd Circuit Ruling on Internet Gambling Still Up In The Air

On Tuesday, lawyers from the Interactive Media Entertainment and Gaming Association (iMEGA) argued their case in front of the 3rd U.S. Circuit Court of Appeals. Their intent was to prove that the Unlawful Internet Gambling Enforcement Act (UIGEA) was unconstitutional.

In the article below, Shannon P. Duffy of Law.com reports the likelihood of the 3rd U.S. Circuit Court of Appeals panel sustaining the UIGEA, which makes most forms of online gambling illegal.

“In the high-stakes court battle over the constitutionality of a federal law that bans all Internet gambling transactions that would be illegal in the gambler's state, a trio of federal appeals judges in Philadelphia appeared unlikely on Tuesday to strike the law down.

Instead, all three judges on the 3rd U.S. Circuit Court of Appeals panel seemed inclined to uphold the Unlawful Internet Gambling Enforcement Act of 2006 and to reject arguments from two lawyers for a gambling trade association who complained that the wording of the law is so vague it cannot be understood.

The act makes it a crime for gambling businesses to ‘knowingly accept’ any funds ‘in connection with the participation of another person in unlawful Internet gambling.’

Law professor Stephen A. Saltzburg of George Washington University, arguing for the Interactive Media Entertainment & Gaming Association, said the law is ‘so vague that reasonable people would have to guess’ about its meaning.

A typical Internet gambler, Saltzburg said, may visit a gambling Web site in Costa Rica, where gambling is perfectly legal, and that transaction would be conducted in Costa Rica. By virtue of the Internet, he said, that gambler did not need to get on a plane, but he nonetheless was visiting a site in Costa Rica.

But 3rd Circuit Judge Kent A. Jordan was unimpressed.

‘No matter how metaphysical you want to get, I'm not in Costa Rica -- I'm in Delaware,’ Jordan said.

Assuming that Delaware state law says Internet gambling is illegal, Jordan said, the federal law simply criminalizes the wire transfer of funds related to that illegal transaction.

‘I'm struggling with what's vague about that,’ Jordan said.

Judge Dolores K. Sloviter said she, too, was having difficulty grasping the vagueness argument.

‘It may be difficult to prove where the bet was placed, but that doesn't make the law unconstitutionally vague -- that's a question of proof,' Sloviter said.

But Saltzburg said the vagueness lies in the statute's failure to define the term ‘unlawful Internet gambling.’

‘It's not at all clear that Delaware or any state can regulate international commerce,’ Saltzburg said.

Jordan interjected and said Saltzburg's argument would ‘put the rabbit in the hat.’ The issue, Jordan said, was not where else in the world a transaction was taking place, but only the conduct that was taking place in Delaware.

Saltzburg pressed his point, saying that if the hypothetical Delaware gambler ‘voluntarily accepts’ to be fully bound by the laws of Costa Rica, where gambling is legal, the federal statute is vague because it fails to define such a transaction as illegal.

At that point, Judge Thomas L. Ambro joined his colleagues in rejecting the fundamental premise of Saltzburg's argument.

‘You know you're in Delaware,’ Ambro said. ‘So it doesn't make any difference that you agreed to be bound by Costa Rica law.’

Jordan said gamblers ‘could have a beef’ with the way state laws were drafted, but ‘that doesn't mean this statute is vague.’”

Joe Brennan Jr., Founder of iMEGA.org, expressed to Gambling911.com Tuesday evening that these types of Appellate hearings are often difficult to read.

"Our attorneys have left hearings thinking they didn't stand a chance of a favorable decision and were shocked to learn later they had won," said Brennan, Jr.  "The judges were tough with both sides."

Full House says: I totally agree with Mr. Brennan. It’s difficult to read the outcome of this type of Appellate hearing. The odds just seem to go back and forth. There are a lot of organizations and many politicians pulling to remove this ban and the 3rd U.S. Circuit Court of Appeals panel should take all of their pleas into account. Though, as of now a decision is up in the air. One could be delivered in about 30 days and upwards of three months.