iMEGA

1. A trade organization designed to bring cooperation between government and the internet industry.

iMEGA UIGEA Lawsuit

March 6th, 2008 marked a milestone date for the internet gambling industry. In a United States District Courtroom in New Jersey, Judge Mary L. Cooper granted the Interactive Media Entertainment and Gaming Association (iMEGA) standing to sue to declare the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional. In the process, Judge Cooper disagreed with many of iMEGA's legal arguments, but granted standing anyway. The case was appealed by iMEGA to the Third Circuit Court of Appeals.

iMEGA charged that the UIGEA should be "void for vagueness," a concept reinforced by comments from financial service industry representatives during various Congressional hearings. The UIGEA defers to existing (and oftentimes conflicting and unclear) State and Federal laws in order to determine what is legal and illegal. iMEGA also claimed that the UIGEA tramples on privacy rights and violates other facets of the First Amendment of the United States Constitution.

On October 29th, 2008, the United States Government filed a brief with the Court of Appeals, charging that iMEGA lacked standing to sue and that the "void for vagueness" argument, central to iMEGA's case, was not brought up at the trial level.

Two weeks later, iMEGA submitted its own brief to the Third Circuit, refuting the Government's claims. It charged that the "void for vagueness" argument was addressed in Judge Cooper's decision specifically and that the UIGEA issues no blanket guidelines regarding what activities are legal and illegal under it.

In January of 2009, iMEGA was approached by the Third Circuit Court of Appeals for its availability in April. Oral arguments have yet to be scheduled and a three judge Appeals panel has not been named.

iMEGA Kentucky Lawsuit

In September of 2008, it was revealed that Kentucky Governor Steve Beshear ordered the seizure and possible forfeiture of 141 internet gambling domain names, including those belonging to online poker rooms such as Full Tilt, PokerStars, and Ultimate Bet. If successful, the sites would be available not just in Kentucky, but across the world.

On September 26th, 2008, continuance was granted in the case and oral arguments were scheduled for early October. On October 16th, Judge Thomas Wingate upheld the actions of Beshear and scheduled a final forfeiture hearing for December.

iMEGA, which is flanked in the case by the Interactive Gaming Council (IGC) and lawyers for several of the sites in jeopardy, immediately filed a writ of prohibition to the Kentucky Court of Appeals to intervene. Writs of prohibition can be filed in cases where the prosecution (in these proceedings, the Commonwealth of Kentucky) did not have jurisdiction to act or where irreparable harm will be caused by the end result of the case (forfeiture of the domain names). The Court of Appeals granted the writs and announced that it would hear the case.

In December, lawyers for iMEGA and the IGC appeared in front of the Court of Appeals in Louisville. The Court received amicus briefs filed by the Poker Players Alliance (PPA), American Civil Liberties Union (ACLU), and Electronic Frontier Foundation, among others. The one hour session took place on December 12th.

On January 20th, 2009, the Court of Appeals ruled by a 2:1 margin that the Commonwealth did not have jurisdiction to act. Judges Michelle Keller and Jeff Taylor ruled in the majority, while Judge Michael Caperton asserted that domain names were part of a much larger gambling device.

The case centers on whether domain names, which are located in cyberspace, can be seized as "gambling devices" according to Kentucky state law. The term traditionally refers to tangible objects like slot machines and roulette wheels that would be found in an underground casino. Moreover, illegal gambling is a criminal offense in Kentucky. However, the prosecution brought on a civil forfeiture suit, not a criminal case.

The State has appealed to its Supreme Court. No time line has been given as to whether the highest court in Kentucky will hear the case.

About iMEGA

The organization is based in Washington, D.C. and was founded in 2007. According to its website, its mission is to pursue "constructive engagement with government at the Federal and State levels to ensure that the challenges of this still nascent medium are addressed with the full participation of the people and companies that have built the Internet into the powerful influence on society it has become."

Its Chairman is Joe Brennan, former Director of Strategy for AOL and executive of Nextel. His experience in the industry has led him to work with the NFL, NBA, MLB, and NASCAR. Its General Counsel is Ed Leyden, who has taken the floor for the internet gambling cases in Kentucky and New Jersey.