The U.S. Court of Appeals for the Third Circuit rejected a claim by New Jersey-incorporated Interactive Media Entertainment & Gaming Association that current laws aimed at cracking down on online gambling are too vague, unconstitutional and infringe on an individual's right to privacy.
The decision comes amid a struggle between the Justice Department, which wants to shut down the online-gambling industry, and several members of Congress who are advocating legalization and view it as a potentially important revenue generator.
The court's decision upheld the Unlawful Internet Gambling Enforcement Act of 2006, which banned credit-card companies or other institutions from processing payments for online betting.
Joe Brennan Jr., iMEGA’s chairman, said that while the association’s members were disappointed that the court did not overturn the law, they felt there was a silver lining to the court’s 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.”
Brennan also noted that, in deferring to state law, the court’s decision is consistent with traditional gambling law in the US. “States have always held the power to regulate gambling in this country, not the Federal government. The court’s ruling seems to say ‘back to the future’ when it comes to regulating Internet gambling, so we will turn our attention to the states to make the case that this industry can be properly regulated and produce badly needed tax revenue.”
The court said,
"It bears repeating that the Act itself does not make any gambling activity illegal. Whether the transaction in Interactive's hypothetical constitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet."
Mr. Brennan said there are six states where Internet gambling would violate state laws. Thus, "There are 44 states where this is an opportunity for Internet gaming to become regulated and normalized," he said.
A few months ago, federal authorities in New York froze bank accounts holding $34 million belonging to 27,000 online-poker players, and last September the state of Kentucky received a court order to seize more than 100 Internet-gambling sites that it said were operating illegally.
Opponents of online gambling say such activity would promote gambling addictions and attract minors. However, critics of the ban say the laws remain murky and are sometimes contradicted by state laws.
The casino industry is also divided on the issue. The American Gaming Association is neutral on online gambling "due to the divergent views of our members.
In May, Rep. Barney Frank, chairman of the House Financial Services Committee, proposed legislation to legalize and regulate Internet gambling so that revenue could be taxed and consumers would have some protections. The legislation is pending in the committee.
Delaware officials tried to legalize sports betting in their state, arguing that they enjoy grandfather rights under the 1992 law.
But the appeals court last month struck down the attempt, limiting the state to the parlay bets on professional football games that were allowed at the time.
More Info:
http://www.imega.org/
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