3rd Circuit Court Upholds UIGEA, But Defers Power To States

Gambling News - September 3rd, 2009 - Written by Glen

While many were under the impression that the Unlawful Internet Gambling Enforcement Act provided prohibition on a federal level, the US 3rd Circuit Court has determined that the states themselves, and not the federal government, would have the power to impose or remove restrictions on the Internet gaming community. The Interactive Media Entertainment and Gaming Association, iMEGA, challenged the legality of the UIGEA itself, and after deliberation, the court decided to place the power on the states.

In the United States, six have laws regarding Internet gambling, while the rest have excluded the issue from their statutes. Where the bettor resides, as well as where the operation is located, will determine the legality of the issue. That being said, most of the offshore gambling venues will still be permissible to operate with American residents.

While the case was a loss, the overall idea amongst iMEGA is that the ruling was not a total loss. By placing the power in the states, more flexibility is an option. iMEGA's chairman, Joe Brennan Jr., added that gambling laws within the States have always rested in the hands of the states themselves, rather than the federal government.

In addition to their positive view on this case's outcome, iMEGA has reported that they may seek an appeal. An appeal, should it be approved, would bring the case to the next highest court. Brennan also stated that "[iMEGA] will turn [their] attention to the states to make the case that this industry can be properly regulated and produce badly needed tax revenue."

As many states are adding new levels of gambling to rectify their short budgets, online gambling may see a surge in legislation. California is working on a state wide initiative, while rumors circulate in Nevada about a possible future. Federal legislation is also in the works to overturn the UIGEA, with a "game of skill" sponsorship by Senator Menendez of New Jersey and a regulatory Bill in the works by Barney Frank. Though neither Bill is likely to go into effect prior to the full force of the UIGEA, which is to be enforced by December, 2009, there is still hope on the horizon for all online gamblers.

Source - iMEGA

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