A US court last week upheld the Unlawful Internet Gambling Enforcement Act as constitutional.
Igaming lobby group IMEGA, in a case brought against the US Attorney General, contended that the current law was unconstitutional and unworkably vague. Lawyers for IMEGA argued that the term 'unlawful Internet gambling', undefined in the act but crucial for its operation, gave those charged with compliance with the Act (ie banks, financial institutions) insufficient guidance as to what activity was supposed to be prohibited.
An example cited was of a gambler in a US State that prohibits all forms of gambling accessing a gambling site based in a jurisdiction where online gambling is legal...is this unlawful? According to a three-judge panel of the Third Circuit Court of Appeals yes it is. The question turns simply on whether such activity is legal or not in the State in which the player is resident.
Interestingly, a clear distinction was also made between the 'unlawful internet gambling' and 'illegal internet gambling'. While the court found that making a determination as to what constituted the former was possible rendering the Act workable. Therefore, banks and financial institutions with obligations to block financial transactions related to online gambling should be able to do so. But the act of gambling online from a US player's perspective is not 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...It bears repeating that the act itself does not make any gambling activity illegal.'
Of course the above consideration of whether and to what extent UIGEA is workable or constitutional may become irrelevant if repealing legislation is passed and becomes law.
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