By Joe Zusman | September 3, 2009

The United States 3rd Circuit Court of Appeals issued their ruling in a case challenging the constitutionality of the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) brought on by the Interactive Media Entertainment and Gaming Association (iMEGA) on Tuesday. The panel of three judges elected to uphold the law, refuting iMEGA´s arguments that the act was vague and also infringed upon individuals´ right to privacy.

While the court ruled in favor of the UIGEA, the decision clarified points of the law, including what qualifies as an illegal gambling transaction. The court also asserted that the UIGEA did not explicitly make any form of gambling illegal, a point of clarification that many online gambling advocates perceived to be a silver lining in the decision against iMEGA.

The ruling deferred to existing state laws to determine the legality of a given gambling transaction. Judge Dolores Sloviter, a member of the panel of three judges who heard the case, offered her thoughts on the matter in the court´s written ruling. “It bears repeating that the Act itself does not make any gambling activity illegal”, wrote 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.”

In a statement released by iMEGA the not-for-profit group´s chairman, Joe Brennan Jr., saw the court´s clarification as a victory even though iMEGA lost the appeal. “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”, Brennan stated. “It’s not perfect, but it’s a good start.”

As for iMEGA´s arguments about the vagueness of the law and the violation of privacy, the court disagreed with the group on both fronts. On the issue of vagueness, the court dismissed iMEGA´s claims on the grounds that a gambling business would be able to determine whether or not it was accepting an illegal gambling wager based on pre-existing gambling laws and the language of the UIGEA. The court also rejected the privacy argument, agreeing with the initial ruling in the District Court case that iMEGA did not have legal standing to argue on behalf of individual litigants. Moreover, the court asserted that commercial financial transactions are not protected under a citizen´s right to privacy.

In iMEGA´s statement following the ruling Brennan said the legal team at iMEGA would review the written decision and consider making an appeal.

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