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Unknown group sues DOJ over gambling laws

The fundamental right of all Americans to lose money

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GIGSE 2007 An obscure organization - the Interactive Media and Gaming Association (iMEGA) - filed a lawsuit in federal court today seeking to challenge American policy on internet gambling.

The suit seeks both an injunction against the pending enforcement of the controversial Unlawful Internet Gambling Enforcement Act, as well as a general decriminalization of federal internet gambling policy. The suit names the inept and beleaguered Attorney General Alberto Gonzalez as defendant, as well as the Federal Trade Commission and the Federal Reserve.

Although a Google search by this reporter failed to turn up so much as a website for the previously unknown organization, the announcement stirred up some discussion at the Global Interactive Gaming Summit and Expo (GIGSE), currently underway in Montreal. The head of iMEGA, Edward Leyden, as well as the group's attorney, Eric Bernstein, will be speaking about efforts to repeal the UIGEA at the event on Thursday.

"The purpose of the Unlawful Internet Gambling Enforcement Act is to prevent Americans from engaging in their fundamental rights to conduct their lives in the manner they wish to live it - to be free from the government imposing public morality in the privacy of one's home", says Eric Bernstein, attorney for iMEGA.

Well, maybe.

The phrase "fundamental rights" is a legal term of art referring to certain basic civil liberties that merit strict legal scrutiny under the American Constitution, and although poker is a venerable American tradition - and Supreme Court Justice Antonin Scalia is an avid poker player - it seems doubtful that the Supreme Court will elevate online gambling to a level of constitutional protection generally reserved for racial discrimination or political speech.

If the US Department of Justice (DOJ) were to shut down this publication for criticizing DOJ policies toward gambling websites, that would be one thing; were the DOJ to shut down a gambling website itself, that would be something else entirely.

Although the lawsuit will almost certainly fail on that argument, it also seeks to force the US to comply with its international obligations under the WTO. Since 2003 the US has been embroiled in a bitter and bizarre dispute with Antigua and Barbuda, a tiny offshore gambling and financial haven situated in the Caribbean that sought to force the US to allow Antigua to offer its online gaming services to American citizens.

Sauce for the goose

Antigua correctly noted in its filings that remote gaming is widespread in the US (although primarily restricted to lotteries and horse racing) and the WTO has ruled repeatedly against the US, each time more emphatically than the last as the US has dragged its heels through the WTO appeals process.

The DOJ is now threatening a nuclear option of sorts: to redefine its own basic commitments under the General Agreement on Trade in Services (GATS), a stratagem that would essentially eviscerate a major free trade agreement the US spent the better part of a decade negotiating under previous, more balanced, administrations.

As I. Nelson Rose, the leading American authority on internet gaming law, noted in his excellent keynote address to GIGSE, treaty agreements are subject to Senate ratification, carry force of law, and are not something a president can simply toss in the bin when he tires of them. The specter of retaliatory action by the EU, Japanese or - better yet - the Chinese will certainly prove to be powerful threats, and ultimately far more significant catalysts for a long overdue revision of federal gaming policies than a civil suit by an unknown advocacy group.

That is not to say the lawsuit is nothing more than a publicity stunt - in fact, one of the reasons federal laws on this issue are in such chaos is that virtually all defendants cop a plea with the government, leading to a relative paucity of appeals and judicial definition. Does the Wire Act really only apply to sports betting, as some read it? Didn't the Interstate Horse Racing Act - contrary to DOJ claims - repeal what came before it, being last in time? Who knows?

In a civil suit, to the contrary, the plaintiffs will likely push an appeal as far as possible, forcing the courts into a timely debate about how much of what Professor Rose refers to as judicial debris should be swept away in the light of technological changes and international agreements.

Rose took a cautiously optimistic position on the industry this author wholeheartedly supports - that the combination of international pressure, American weakness, and technological inevitability will lead to a fitful revision of American internet gaming laws. Rose seemed particularly inclined to believe that California card clubs will within the next few years be able to offer remote poker to California residents.

The spread of gaming is ultimately unstoppable, according to Rose, as neighboring jurisdictions clammer for a piece of the gaming action. The expansion of gaming jurisdictions in the last 30 years is compelling evidence in support of that argument. ®

Burke Hansen, attorney at large, heads a San Francisco law office

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