Online Gambling Industry Could See Relief with Suit Against Gonzalez

[Coy_Roy]

http://www.gambling911.com/Online-Gambling-Suit-Gonzalez-060507.html

[oldbookguy]

Exactly a point I have made before, though they may be jumping the gun until the actual rules are posted and put into action.

obg

[vabogee]

can someone put this lawsuit action into layman's terms? what could this potentially mean for us?

[JPFisher55]

It could mean that a federal court declares the UIGEA to violate the US Constitution or that the WTO decision has precedence over the UIGEA. Thus, the DOJ could not enforce it. If the law is not enforceable, then you could use credit cards, ewallets etc. to fund online gaming sites or to withdraw funds from online gaming sites. The other federal anti-gambling laws could be held to not apply to offshore online gaming sites.
We will not know the extent of the lawsuit until we read the actual petition.
I don't know if this organization has standing to bring this litigatiion. If they do, then why didn't the PPA bring a similar lawsuit.
Skallagrim can probably explain this better than I can.

[JPFisher55]

I just googled the Interactive Media Entertainment and Gaming Association. Their website is under construction. Some parties that oppose the UIGEA must have established this organization to be a front to go after the UIGEA. Probably the banks are behind it, but it could be some online gaming sites or even big poker pros. Good news overall.

[Grasshopp3r]

I would like to see Sen. Kyl's response to this.

For those who need avatar suggestions, here is the Eric Bernstein: http://www.embalaw.com/attorneys_bernstein.htm

He is presenting at a conference on this topic at GIGSE.

http://www.gigse.com/2007/index.cfm/page/speakers

[Skallagrim]

I will keep an eye on this one friends, but at this point it is hard to say what is actually being contested.

I personally like the idea that the guy in the story is talking about "the privacy of your own home" but that principle has a very limited usefulness in the courts (or you could smoke pot in your own home).

But it is a basic rule that a properly ratified treaty trumps any passed law (except the constitution itself), so the WTO thing has life, its just hard to say exactly where that ends up (i.e., if we agree to pay the penalties per the treaty are we breaking the treaty? - does that mean all gambling or just horse racing; things like that. It is settled that we are breaking the treaty though).

There are some other possible challanges (commerce clause, principle jurisdiction, etc...) that could be intersting.

The article said nothing specific about a "poker is skill" based challenge.

What I will say at this point is that there is very little "settled" law in this area. So anything could happen and this should be interesting.

Skallagrim

Wish I was on the inside of this one, but I am not.

[oldbookguy]

Skallagrim, I read this as you do and it is in part a commerce claus issue, the term used in the constitution is regulate, not ban.

If it becomes a commerce claus issue, then even the 14 states that have laws against Internet wagering could become moot as states do not and cannot regulate International Trade (power granted to the Federal Government), only interstate.

So, could congress pass a law allowing sites in certain countries to be blocked, yes (although there are already banking regulations in place that should cover this). This is done all the time; I.E. I can ship a computer to England but not Iran.

Additionally there are conflicting laws concerning Internet commerce. Some read the transaction is where the computer is located (to allow states to collect sales tax from state residents shopping online) while others state it is where the product is located (with restrictions on ability to ship to a SPECIFIC location only).
Commerce is regulated, not banned.
There are privacy issues as well that are settled law concerning the internet privacy, porn for example.

Another problem even in the Frank bill, I.D.verification, the ACLU (ugh to them) has already fought this and limited the law in respect to porn.

Agreed, this should be interesting to follow and really it is difficult to comment on the suit until it can be read.

obg

[1p0kerboy]

[ QUOTE ]
I personally like the idea that the guy in the story is talking about "the privacy of your own home" but that principle has a very limited usefulness in the courts (or you could smoke pot in your own home).


[/ QUOTE ]

You can't smoke weed anywhere. You can play poker in casinos.

The equivalent would be if the government said "you can't drink in your own home, but you may go to a bar and drink".

Huge difference.

[Grasshopp3r]

It is less likely that you will be arrested for illegal activity in your own home, in private.

[Coy_Roy]

http://www.gambling911.com/Alberto-Gonzales-Lawsuit-060507.html

Alberto Gonzales Lawsuit Could Set Precedent

The Interactive Media Entertainment & Gaming Association (iMEGA) filed a request Tuesday seeking judgment restraining the United States and Attorney General Alberto Gonzales from enforcing the "Unlawful Internet Gambling Enforcement Act of 2006" (UIGEA). The current law prevents U.S. credit-card companies and banks from processing payments to online gambling businesses.

iMEGA is believed to be made up of many different individuals with extensive amounts of funding. Rumors that a suit against Arizona Senator Jon Kyl, one of the architects of UIGEA, is forthcoming have not been confirmed.

The news is some of the best for a billion dollar online gambling industry that has seen its fair share of ups and downs - but mostly downs - over the past nine months.

Eric Martin Bernstein, Esq. represents iMEGA and is presently speaking at an online gambling industry tradeshow in Montreal, Canada this week.

"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 M. Bernstein, Esq., attorney for iMEGA.

The lawsuit also seeks to stop the enforcement of the UIGEA based on the
recent ruling of the World Trade Organization in a final appeal which
found the United States in contempt of treaty obligations regarding
Internet gambling. Washington spokesmen recently said the United States
would not appeal the ruling in favor of Antigua and Barbuda, the
Caribbean nation which won the WTO challenge against the US and one
nation where Internet gambling is legal. Instead, Washington says, the
US will try to modify its treaty obligation to eliminate Internet
gambling. The WTO ruling permits sanctions to be imposed against the
US.

With 25 years of experience, Mr. Bernstein handles matters on a wide range of subjects within the labor / employment law fields, including general advice and assistance, contract negotiations, interest and grievance arbitrations, fact-finding and mediation, disciplinary matters involving public safety and non-public safety employees.

As a municipal attorney, Mr. Bernstein has handled such diverse issues as land use matters, ethics issues, municipal construction, local public contracts law issues, tax appeals, open space acquisition and government affairs. And as a board of education attorney, Mr. Bernstein has handled matters of special education, teacher/student discipline and budget appeals.

In regard to First Amendment / Internet law, Mr. Bernstein is a member of the First Amendment Lawyer's Association and the Free Speech Coalition. Mr. Bernstein handles all aspects of First Amendment and Internet law, except for patent issues.

In addition to his practice, Mr. Bernstein is a regular and frequently requested speaker at state and national organizations and has been teaching for the Rutgers University Bureau of Government Research since the early 1980s. Mr. Bernstein has written articles for publication and serves as a Director of the New Jersey State Bar Association Local Government Law Section, where he was previously Vice President and Editor of its newsletter.

[JPFisher55]

[ QUOTE ]
[ QUOTE ]
I personally like the idea that the guy in the story is talking about "the privacy of your own home" but that principle has a very limited usefulness in the courts (or you could smoke pot in your own home).


[/ QUOTE ]

You can't smoke weed anywhere. You can play poker in casinos.

The equivalent would be if the government said "you can't drink in your own home, but you may go to a bar and drink".

Huge difference.

[/ QUOTE ]

Good point. You do have a right to contract with sites and individuals to play poker over the Internet. But does a valid governmental purpose (think protection of addicts, etc.) overcome your right? Who knows.

[HRFats]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I personally like the idea that the guy in the story is talking about "the privacy of your own home" but that principle has a very limited usefulness in the courts (or you could smoke pot in your own home).


[/ QUOTE ]

You can't smoke weed anywhere. You can play poker in casinos.

The equivalent would be if the government said "you can't drink in your own home, but you may go to a bar and drink".

Huge difference.

[/ QUOTE ]

Good point. You do have a right to contract with sites and individuals to play poker over the Internet. But does a valid governmental purpose (think protection of addicts, etc.) overcome your right? Who knows.

[/ QUOTE ]

There are people addicted to alcohol, porn, coffee, tobacco, etc. They are still allowed to indulge in these addictions in their own home. How is poker different?

[JPFisher55]

I agree, but modern courts have permitted lots of legislation designed to protect addicts from themselves.

[Legislurker]

Forgive my legal stupidity here. IF the suit somehow found the UIGEA in violation of the treaty, and it was stricken down........but AFTER the ruling on it the US renegotiated its committments..........would the UIGEA have to be repassed. I guess what I am asking is if you pass a law that is illegal when passed, and now, but becomes legal.........does it stay legal? Would they need a new UIGEA or would it just be suspended until such time as its legally enforceable?

[JPFisher55]

The court will have to consider the legality of the USTR's actions to withdraw the gambling commitments. It is not certain that this is lawful under WTO in this circumstance. Most likely the WTO will have to rule on this matter before the federal judge decides this lawsuit. Unless the judge finds that the UIGEA violates the US Constitution. It will take a long time.

[MiltonFriedman]

Was the suit filed yet ?

[MiltonFriedman]

Certain issues will be contested pretty quickly, if there was a request for a preliminary injunction or temporary restraining order filed.

(As a curious matter, why would Bernstein be beating the bushes at GIGSE ? He has plenty of work to do at home now.)

A party seeking injunctive relief must, in laymen's terms, show the Court two things: Irreparable harm and a likelihood of success on the merits.

Preliminary equitable relief requests can be pretty fast track, depending upon what precisely is sought and local court rules/customs.

The ACLU v Gonzales precedent for injunctive relief may be limited however here. The underlying activity of the individual plaintiffs there was legal in some states.

Associational standing only gets you so far, you also need real plaintiffs with real, lawful activity being impacted.

Unless this case has/gets some poker plaintiffs, it will fail on showing a likelihood of success on the merits and a motion to dismiss.

Was there a motion for a TRO or preliminary relief filed ? That starts a short clock running.

[JPFisher55]

From the articles on gambling911, it seemed that the lawsuit was more like an action for declaratory judgment than a TRO. But the articles were not that specific.
I, also, wondered about the standing of the plaintiffs.

[Emperor]

I know that the PPA has voiced that they don't wish to go the brute force route, but I can't avoid the desire to get my checkbook out and send a contribution to iMEGA.

[Skallagrim]

Just to be clear, it is illegal under some state laws to play poker in your own home. Washington and Louisiana of course make it a felony to play online in your own home. States like South Carolina and Tennessee make it illegal to play poker for money in your own home under any circumstances (and there are a few others).

My point was simply that it has been a long time since a court has recognized the "privacy of your own home" as a constitutional right in any context other than search warrants (which also explains why its harder to arrest people for in home activities).

The last Court I know of to do it was the Alaska Supreme Court when they held you could grow and smoke pot in your own home under the ALASKA Constitution's right to privacy.

That principle should apply to online poker too, I agree, but courts generally dont.

Skallagrim

[Legislurker]

For privacy in the home there was the striking down a couple years ago of the Texas anti-sodomy law. Freedom with your genitals and orafices and freedom with your money seem to be on a commensurate level to me.

[morphball]

[ QUOTE ]
But it is a basic rule that a properly ratified treaty trumps any passed law (except the constitution itself), so the WTO thing has life, its just hard to say exactly where that ends up (i.e., if we agree to pay the penalties per the treaty are we breaking the treaty? - does that mean all gambling or just horse racing; things like that. It is settled that we are breaking the treaty though).


[/ QUOTE ]

If there is a treaty that says one thing, and the Senate later passes a bill that conflicts with the treaty, the Court's will generally apply the statute and reason that the Senate meant to nullify the treaty.

[MiltonFriedman]

.... however, hooking is largely illegal in the US, even if it is "out-call".

[TheJokerIsWild]

While I certainly like their agenda, it sounds like a pretty stupid lawsuit. Unless the article is leaving out other legal grounds, their argument is simply..."this law interferes with our freedom and we don't like it." How many laws are there that don't do that? In order to overturn an enacted statute, you must prove that it is unconstitutional -- either on its face, or as applied. Well, it hasn't been applied yet, so that leaves the "on its face" analysis. This statute is not unconstitutional on its face. Congress has the power to regulate/control/direct interstate commerce. There are several seminal interstate commerce cases proving that the courts allow Congress apply an extremely broad brush in "regulating" interstate commerce. For instance, discrimination is illegal under federal law simply because virtually every employer, lodging establishment, etc utilize instrumentalities of interstate commerce (ie. US mail, telephones, various products and services from other states). The same argument is used to allow a federal prohibition on the use, distribution, or sale of narcotics. Both of these prohibitions infringe on personal freedoms. For example, a KKK member would complain that a prohibition on discrimination prevents him from running his business in conformity with his personal beliefs. A recreational drug user's freedom of choice to place a particular substance in his body is infringed by US drug laws. A pedophile is not allowed to pursue his sexual preferences by way of pornographic material because of Congress' right to regulate interstate commerce. Morality is legislated all the time. So how the hell is this argument going to work??? Are these people on drugs? Unless there is something else in the Complaint that isn't mentioned in this article, I predict this lawsuit will be dismissed almost immediately by way of demurrer, a motion to dismiss, or by summary judgment within the next 8-10 months, or sooner.

[Sniper]

Website coming soon... http://imega.org/

This is a newly formed organization, and it will be interesting to see who is really behind this action. /images/graemlins/wink.gif

[Grasshopp3r]

All this needs is an activist judge that is willing to kick some sand on Kyl and the moralists and issue a TRO.

I am amazed that Nevada has not pushed into internet gaming and tried to carve it out for themselves.

[MiltonFriedman]

"Unless there is something else in the Complaint that isn't mentioned in this article,"

Take a look at the ACLU v. Gonzales case, DOJ was enjoined from enforcing the federal statute against children access to porn. The reason was that a website and content legally offered over the Internet for viewers in some states might be illegal in others. The burden on the interstate businesses offering the services was overly heavy because of uncertainty and the availability of such things as age verification, which Congress ignored.

This seems the best argument here, at least for poker, but not for sportsbetting.

It is not that Congress cannot regulate interstate commerce, it is the half-assed way it has chosen to do so ... by subjecting businesses and consumers whose activity is legal in some states to a defacto ban on their financial transactions.

Clearly, geographic screen would have been less intrusive.

(I think a Motion to Dismiss will be filed a lot sooner than 8 months. If there are some "legal" activities impacted, the suit has some chance. I'd say about 20%, depending upon where it is/was filed.)

[MiltonFriedman]

"I am amazed that Nevada has not pushed into internet gaming and tried to carve it out for themselves."

What do you think the Frank bill is ? Read it and tell me it is not precisely a Nevada push, aided by the PPA ?