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iMEGA Seeks Exemtion

The Unlawful Internet Gambling Enforcement Act (UIGEA) was enacted nearly a year ago and yet the Department of Justice and the Federal Reserve have yet to announce the regulations and specifications that will give the online casino ban the means to uphold cases in court and give financial institutions clear guidelines on acceptable transactions. Based on the lack of regulations and alleged unconstitutionality of the UIGEA, the Interactive Media Entertainment & Gaming Association (iMEGA) has filed a case against the U.S. Justice Department. The case has been scheduled to appear in court at the end of the month, September 26th, 2007, but a recent cross-motion for dismissal could end the case sooner and leave many in the online casinos industry right where they were last October.

The cross-motion will be considered in early September, and only if the motion for dismissal fails will the case continue to its scheduled court date. The U.S. government filed for the dismissal claiming the iMEGA’s case lacks substance. The iMEGA case specifically attacks the limitation of the private activities of online casino players and the fact that the deadline for regulations has come and passed. In the dismissal though the U.S. specifically addresses both of these allegations. The motion for dismissal states, "Plaintiff purports to sue on behalf of its members who fear prosecution under the UIGEA. None of Plaintiff's members, however, has been prosecuted or threatened with prosecution. Thus, their fears are insufficient to confer standing on them or on an association purporting to represent them."

Another hit at the online casino gambling group iMEGA is the fact that a main part of their case, the lack of regulations more than 270 days after the act was passed, has been turned as a positive by the U.S. government. The government claims that because the Act has no specific regulations as of yet, there is nothing that iMEGA’s members can be blocked from… the government cannot rule on regulations that do not yet exist. Because there are no regulations, there is nothing that the online casinos and internet gambling companies need to be protected from.

The U.S. motion for dismissal also claims that both "lack of jurisdiction" and "failure to state a claim upon which relief can be granted" are reasons that the case should not go to trial. But even in light of this recent development and the government’s claims, iMEGA and the online casino companies and gaming groups it represents are continuing to develop and strengthen its case to be presented in late September.