iMEGA Moves Forward with UIGEA & Kentucky Domain Seizure Appeals

Despite devoting considerable time and resources in leading the challenge to block the commonwealth of Kentucky's recent attempt to seize 141 online poker and gambling domain names, the legal team for the Interactive Media Entertainment and Gaming Association (iMEGA) has stated they feel they are more than capable of pursuing cases against the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and Kentucky at the same time.

UIGEA STATUS: DoJ Files Brief in Response to iMEGA Appeal

The US Department of Justice has just filed their response brief with the US 3rd Circuit Court of Appeals, in response to case iMEGA brought to Federal court challenging the constitutionality of UIGEA. The case is now named iMEGA v. Mukasey, et al, reflecting the change in government staff.

iMEGA's appeal follows a ruling by Judge Mary Cooper (US District Court, Trenton) that established iMEGA's associational standing to challenge UIGEA on the behalf of its members and the Internet gambling industry, but was dismissed by Judge Cooper without considering the constitutional issues raised in iMEGA's challenge (click here for related article).

The brief filed by the US DoJ's attorneys asserts that iMEGA could not argue UIGEA should be "void for vagueness", according to an article on iMEGA's website. The brief also claims iMEGA did not raise the issue at the trial level, and that nonetheless UIGEA is NOT sufficiently vague in order to meet the standard necessary for declaring it unconstitutional.

"It's hard to believe the government is making that claim, when Judge (Mary J.) Cooper herself preserved due process concerns in her decision," said Joe Brennan Jr., iMEGA's chairman.

It's also incredible that the DoJ thinks the UIGEA is not sufficiently vague, when representatives of the U.S. Department of the Treasury and Federal Reserve System testified at the congressional UIGEA hearing April 2, 2008, that U.S. financial institutions will face challenges in attempting to comply with UIGEA. Since most payment systems are not well designed to comply with this law, it will be very difficult to shut off payment systems for use of Internet gambling transactions, said Ms. Louise Roseman, Director, Division of Federal Reserve Bank Operations and Payment Systems, Board of Governors of the Federal Reserve System. "The implementing statute will not be iron clad at all."

In addition, the government asserted in its 24-page brief that iMEGA lacked the standing to represent individual gamblers.

iMEGA's legal team now has 15 days to submit a brief responding to the government's arguments. After that, it will be up to a three-judge panel (yet to be named) as to when oral arguments may be heard from both parties.

"We're very confident today, after reviewing the government's brief, that we are on track for having this law overturned," Brennan said. "We're looking forward to the opportunity, once this fatally flawed law has been dealt with, to work toward a reasonable, common sense approach by our country to Internet gaming, one that above all affirms our rights and their place in the online world."

KENTUCKY STATUS: Petition to Block Court Decision Filed

Last week iMEGA's attorneys filed a 55-page petition to the Kentucky Court of Appeals for a writ of mandamus, to block a lower court's decision allowing Kentucky to seize 141 domain names. Kentucky's lawyers have sought these domain names, all related to Internet gaming and advertising, in an effort to protect Kentucky's own in-state gambling operations from competition, and to extract tens of millions of dollars in penalties from the domain registrants.

iMEGA identifies a number of procedural and legal errors by Judge Wingate in its writ. One major argument is that the judge wrongfully found jurisdiction against the domain names despite the fact that they are not tangible and have no presence in Kentucky.

The writ also claims Judge Wingate was in error when he applied the Kentucky statue that pertains to the seizure of "gambling devices" which, iMEGA argues, refers only to physical items located in the state and not to intangible domain names.

Due to this and other matters, Pokerlisitngs reported that Judge Wingate has delayed the forfeiture hearing in this case from November 17 to December 3.

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