When the long-awaited regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) were released last week, many questioned what impact they would have on the industry, if any. The regulations still fail to define that the term “unlawful internet gambling” means, instead reiterating that previous Federal and State statutes should be the focal points to determining what is allowed under the law.

Professor I. Nelson Rose, perhaps the leading legal expert in the internet gambling industry, told Poker News Daily that the regulations focus on banks building relationships with their merchants in order to ensure that money funneling in and out of accounts is not being used for illegal internet gambling: “If a bank sets up a relationship with a new commercial customer, they have to make sure they’re not doing unlawful internet gambling. To me, the whole thing seems silly and a tremendous waste of time.”

The text of the rules is chalk full of comments stating that the term “unlawful internet gambling” is not defined by the UIGEA. The regulations include the following analysis: “The Act does not set out the precise activities that are covered by the term… Creating such a list would require the Agencies to formally interpret those laws that are written and enforced by other entities, such as State legislature and law enforcement agencies.” Instead, the text explains that due diligence will be paramount in the UIGEA’s enforcement.

Rose described his perception of the UIGEA’s effectiveness given the new rules: “I don’t think it’s going to make much difference. Publicly trading companies have stopped taking bets from the U.S. If other companies in the industry were violating American law before the regulations came out, then they’re still violating it. If they weren’t violating American law, then they still aren’t.” Rose added that individual transactions will not be scrutinized.

Joe Brennan, President of the Interactive Media Entertainment and Gaming Association (iMEGA), stated in a press release, “It is not possible for our banks and credit card companies to reconcile so many differing state and federal laws on what is considered legal and illegal forms of gambling.” Rose added that the vagueness of the law may have been a result of the authors of the regulations simply giving up.

Poker News Daily asked Rose if he would have advised online poker rooms like Party Poker and Pacific Poker to pull out of the market back when the UIGEA was pushed through Congress by former Senate Majority Leader Bill Frist in 2006. The passage of the UIGEA changed the poker landscape entirely, pushing PokerStars and Full Tilt Poker, who continued to accept customers from the United States, into the front of the industry. Rose commented, “Back when it happened, I certainly would not have advised pulling out immediately the way that Party Poker did. They withdrew before the bill was signed into law. I don’t think that the UIGEA changed anything. Now, the regulations under the UIGEA don’t change anything. But, that’s not to say that what they were doing was legal.”

Part of the reason that Party Poker and Pacific Poker pulled out of the United States was because both publicly traded companies deferred to their shareholders’ interests. Party Gaming and 888 Holdings, the parent companies of Party and Pacific, respectively, are both traded on the London Stock Exchange. Share prices for each of these companies are given at the top of Poker News Daily.

An article that appeared on Politico stated that newly-elected President Barack Obama may try to undo some of the last-minute actions of the Bush Administration, including the implementation of the UIGEA regulations, which are set to go into effect on January 19th. Compliance by financial institutions is not required until December 1st, 2009.

Visit the website of I. Nelson Rose today.

On Wednesday night, the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) were finalized. The new regulations will be implemented on January 19, 2009 as part of the Bush Administration’s “midnight rulemaking.” Today, the Poker Players Alliance (PPA), which is the main lobbying group for the online poker industry, called on its members as well as concerned individuals around the country to act.

The PPA has over 1.2 million members. There are four actions that the organization is urging its members to take. The first is to call members of Congress expressing displeasure with last-minute rulemaking. Players who call Congressional members or their staff members are encouraged to say that they are a constituent, voter, and poker player, and that they are “outraged that the lame duck administration has finalized the UIGEA regulations which will add additional burdens on our already troubled banking sector.” The PPA is also encouraging its members to request that Congressmen support any effort by incoming President Barack Obama to rescind the regulations.

The PPA is also encouraging its members to e-mail Obama’s Transition Team and say that the regulations were “reckless in that they place unreasonable requirements on our nation’s imperiled financial services industry. Bush was reckless in forcing them on the country in his 11th hour. You should introduce legislation to overturn them.” In addition, support for bills like the ones proposed by Barney Frank, Robert Wexler, and Robert Menendez is also desired. Visit the full talking points by checking out the PPA website at PokerPlayersAlliance.org.

In addition, the PPA is using the setback to call for non-members to sign up and call for existing PPA members to contribute money to the cause; suggested donations range from $10 (an Ante contribution) to $500 (an All-In contribution). Free memberships to the PPA are also available. For $20, a Premium Membership allows players to utilize discounts offered at 600 participating merchants through PPA Advantages. In addition, a Premium Membership allows access to the PPA’s Litigation Network of legal counsel, a card protector, and a window decal. Paying members can also donate to the PokerPAC, which is the online poker lobbying group’s political action committee. Members are also encouraged to tell a friend so that as many people as possible are in the know.

An e-mail distributed by PPA Chairman Alfonse D’Amato to the organization’s members stated, “I am sure that you share my outrage over this last-minute ‘midnight rulemaking,’ but I have not lost my drive to correct this injustice and I call on you to join me and the million strong PPA to help continue our fight.” D’Amato is a former three term Senator from New York. Other members of the PPA’s Board of Directors include PPA President John Pappas, Greg Dinkin, Full Tilt Poker pro Chris Ferguson, Jan Fisher, Allyn Jaffrey Shulman, Poker News Daily columnist Linda Johnson, Howard Lederer, Mary Magazine, and Rich Muny.

The PPA has also kept a close eye on the latest developments in Kentucky, where a three judge Appeals Court panel is scheduled to meet on November 18th, which is next Tuesday, to discuss whether to intervene in a case involving the seizure and potential forfeiture of 141 internet gambling domain names. That case is also being spearheaded by the Interactive Gaming Council (IGC) and Interactive Media Entertainment and Gaming Association (iMEGA). Domain names belonging to online poker sites such as Ultimate Bet and PokerStars would be inaccessible by customers around the world if the lawsuit were successful.

Once again, last minute actions were taken regarding the Unlawful Internet Gambling Enforcement Act (UIGEA). In the waning moments of the 2006 Congressional session, the UIGEA was attached to the SAFE Port Act, an unrelated port security bill, and passed by unanimous consent in the Senate. On Wednesday, the regulations of the UIGEA were finalized as part of so-called midnight rule-making by the Bush Administration and will be implemented on January 19, 2009, one day before Barack Obama is sworn in as the 44th President of the United States.

Banks and other financial institutions have until December 1st, 2009 to comply with the UIGEA rules. However, its regulations still do not spell out what is illegal and legal under the law, instead deferring to existing state and federal statutes. The rules read, “Creating such a list [of what is legal and what is not] would require the Agencies to formally interpret those laws that are written and enforced by other entities… The Agencies believe that appropriate due diligence conducted by participants opening accounts would be the most effective method for preventing unlawful internet gambling businesses from gaining access to the payment system.” You can view the full UIGEA regulations by visiting the website of the Poker Players Alliance (PPA).

The UIGEA defines a bet as “the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance.” Fantasy sports receive an exemption in the following language: “Participation in any fantasy or simulation sports game or educational game” is allowed, subject to certain restrictions which the fantasy sports industry has had to adopt. These include up-front prize declarations and rosters not being composed of every player from a certain team.

The definition that the poker and political worlds have been talking about is that of “unlawful internet gambling.” The UIGEA states that the term refers to a “bet or wager [that is] unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.” Any bets allowed under the Interstate Horseracing Act of 1978 are allowed, although Congressman Barney Frank, the Chairman of the House Financial Services Committee, stated in a mark-up hearing that online horse racing’s legality ultimately “depended on which department you asked.”

The lack of clarity as to what is allowed under the UIGEA is noted multiple times in the final regulations. HR 6870, the second version of the Payments System Protection Act, sought to develop a list of what is permissible under the law. In September, the bill passed by a 30-19 vote in the House Financial Services Committee. With a lame duck session potentially beginning next week, the attention of Congress will most likely center on the faltering economy. If HR 6870 is not acted upon prior to the adjournment for 2008, it must be reintroduced in 2009.

An article that appeared on Politico outlined some hope for the online poker industry. The piece described the significance of the Congressional Review Act of 1996: “The law contains a clause determining that any regulation finalized within 60 legislative days of congressional adjournment is considered to have been legally finalized on the 15th legislative day of the new Congress, likely sometime in February.” Therefore, it’s conceivable that when Obama takes office, he will look to overturn some of the last-minute rulemaking of the Bush Administration.

Poker News Daily learned last week that the regulations of the UIGEA were sent from the U.S. Treasury to the Office of Management and Budget (OMB) on October 21st. The Bush Administration had a target date of November 19th to pass the rules initially in order to have a 60 day review period expire before Obama took office.

We’ll have more for you on this breaking story right here on Poker News Daily.

A last-minute attempt by the Bush Administration to push through the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) has prompted the Poker Players Alliance (PPA), the online poker industry’s chief lobbying group, to mobilize its members. On Monday, the organization issued an action alert via e-mail and on its website to its 1.2 million constituents.

A Dow Jones Newswires story published on November 6th revealed that on October 21st, the United States Treasury had sent the final regulations of the UIGEA to the Office of Management and Budget (OMB) to approve. The target date, according to the PPA, of OMB approval is November 19th, as the regulations will then enter a 60 day review period which would end just before President-elect Barack Obama is sworn into office on January 20th, 2009. Members of the PPA are urged to call the Board of Governors of the Federal Reserve at 202-974-7008 or Public Affairs at 202-452-2955.

According to the PPA’s website, callers are asked to make the following four points:

1. The federal agencies responsible for our nation’s economy should not be focused on Internet poker regulations.
2. Finalization of the UIGEA rules will add additional burdens on our already crippled financial systems.
3. Internet poker is a game of skill and form of recreation for millions of Americans; it should be exempted from the UIGEA.
4. Please do not finalize the UIGEA regulations until their impact on our banking systems and average Americans has been fully studied.

Recently, Congressman Barney Frank (D-MA), who has been at the forefront of the fight both to overturn and clarify the UIGEA, authored a letter to Henry Paulson, Secretary of the Treasury, and Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System. Frank’s letter to Bernanke, in part, read, “I strongly urge you not to burden the new Administration with administering a statute which cannot be carried out.”

Jeff Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, commented in a press release distributed by the organization on Monday, “At a time when the financial system is in crisis, it is irresponsible for the Bush Administration to rush through a fundamentally flawed regulation that even representatives of the Treasury Department and Federal Reserve have stated on record is unworkable.” The Bush Administration is attempting a number of “midnight rules,” according to the PPA.

The UIGEA was pushed through Congress in 2006 and was ultimately attached to the SAFE Port Act, an unrelated port security measure. The bill was not discussed in the Senate and instead passed by unanimous consent during the final hours of the Congressional session. It was signed into law on Friday, October 13th, 2006.

Adding fuel to the fire this time around is the influence of William Wichterman, who is a Special Assistant to President Bush. A Safe and Secure Internet Gambling Initiative press release explains, “As recently as March 2008, Mr. Wichterman was a paid lobbyist for the NFL, which has been a strong opponent of all forms of Internet gambling except for fantasy sports – an activity that generates more than $1 billion a year in revenues.” Congressman Steve Cohen (D-TN) wrote a letter to White House Counsel Fred Fielding, which is dated November 7th, asking for an explanation of Wichterman’s involvement.

In September, Frank managed to pass HR 6870, the Payments System Protection Act, out of the House Financial Services Committee. The bill seeks to clarify what the UIGEA deems to be “unlawful internet gambling” by drawing up a list of what is and is not allowed. It was passed by a 30-19 vote on September 16th, but was not discussed on the House floor, in part due to adjournment for general elections as well as the financial crisis in the United States and around the world.

Comments to the Federal Reserve can also be submitted online. Visit the PPA website for more information.

After an article was published by the Dow Jones Newswire, word spread like wildfire through the online poker world that the Office of Management and Budget (OMB) had received the final regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) on October 21st. The regulations may be enacted before the end of the 2008 calendar year. The UIGEA was signed into law on Friday, October 13th, 2006 by outgoing U.S. President George W. Bush.

The UIGEA was passed in the waning moments of the 2006 Congressional session and attached to the Safe Port Act, an unrelated measure dealing with port security. The bill was not voted on in the United States Senate and instead passed by unanimous consent. In a move reminiscent of the 2006 actions by former Senate Majority Leader Bill Frist, who pushed the UIGEA through at the last minute, the Bush administration is urging for these regulations to be enacted before it departs at the end of 2008. The Dow Jones Newswire article states, “It’s standard practice for outgoing administrations to finalize controversial regulations before leaving office, a practice known as a midnight drop.”

Regulations drafted last year, which were open to public comment, lacked clarity as to what the phrase “unlawful internet gambling” meant. John Pappas, President of the Poker Players Alliance (PPA), told Poker News Daily that although the organization does not have a copy of the final regulations given to the OMB by the U.S. Treasury, to his knowledge this concern was still not met. In addition, he commented on why there is a renewed interest in the UIGEA just three days following the 2008 general elections: “The rush is that the Bush administration is trying to put a final stamp on public policy before they leave much in the way that the UIGEA was passed in the dark of night.”

The final UIGEA regulations reached the OMB on October 21st. Agencies had a deadline of November 1st to submit any pending measures. Pappas gives a glimpse into the forthcoming timeline: “The key date is to finalize the rules before November 19th. That way they go through the standard 60 day review process, after which they can be implemented.” The reason for the date of November 19th is that newly elected President Barack Obama will be inaugurated on Tuesday, January 20th, 2009, just outside of the 60 day review window. This means that he will not be able to intervene in this or any other regulations that are finalized before November 19th.

According to the Dow Jones story, Pappas is scheduled to meet with OMB officials today. He told Poker News Daily, “The rules themselves do not comply with the standards and rules of our government.” The PPA has been actively campaigning against the regulations since they reached the OMB two and a half weeks ago.

Ed Leyden, President of the Interactive Media Entertainment and Gaming Association (iMEGA), whose organization is suing to declare the UIGEA unconstitutional, noted that even if the final regulations included a clear-cut definition of what is legal and illegal under the UIGEA, the process of defining what is acceptable is the responsibility of Congress, not the Executive Branch: “The legislature writes the law, not the Executive Branch. The UIGEA does not change existing law. They would be rewriting a new federal statute that defines what ‘unlawful internet gambling’ is and would be violating the UIGEA itself in the process.” The UIGEA defers to existing internet gambling law to determine what is and is not legal.

Formal statements by the PPA and Safe and Secure Internet Gambling Initiative (SSIGI) may be released this afternoon. We’ll have more information on this developing story as it unfolds right here on Poker News Daily.

Congressman Barney Frank (D-Mass) is one of the biggest allies of the online poker world. He’s introduced several pieces of legislation favorable to the industry, including HR 2046, the Internet Gambling Regulation and Enforcement Act. Frank, along with every other member of the United States House of Representatives, was up for re-election on Tuesday night along with one-third of the Senate. Let’s take a look at the election results on a night that saw Democratic Senator from Illinois Barack Obama become the first African-American to be elected President of the United States.

Frank represents the Fourth Congressional District of Massachusetts and won his battle against Republican challenger Earl Sholley in a landslide. The final tally saw Frank pull away 68% to 25%, according to election results found on Yahoo.com. More recently, Frank introduced HR 6870, the Payments System Protection Act. HR 6870 was approved by the House Financial Services Committee, of which Frank is its Chair, but has not yet been discussed on the House floor.

The first version of the Payments System Protection Act was HR 5767. Although it was ultimately defeated in Committee, its bipartisan coalition may set the online poker industry up for success in the future. Frank introduced HR 5767 in conjunction with Republican Congressman Ron Paul. Paul, who represents the 14th Congressional District of Texas, ran unopposed. An amendment to HR 5767 was introduced by another Republican, Peter King, who was re-elected on Tuesday night by voters in the Third Congressional District of New York. He defeated Democratic challenger Graham Long by a count of 64% to 36%.

Two internet gambling study bills have been introduced in past Congresses by Shelley Berkley, a Democrat, and Jon Porter, a Republican. HR 2140 is Berkley’s current version. It was nearly discussed in Committee in July in the House Judiciary Committee and will have to be reintroduced in January if it is not acted upon before the end of the year. Berkley was returned to Washington by voters in the First Congressional District of Nevada, beating Kenneth Wagner by a 67% to 28% margin. Porter was defeated by Democrat Dina Titus by a 47% to 42% edge.

Congressman Robert Wexler (D-Fla), who famously gave the “Shuffle up and deal” command during Day 1D of the 2008 World Series of Poker Main Event, has introduced HR 2610, the Skill Game Protection Act. Wexler represents the 19th Congressional District of Florida and emerged victorious 66% to 27% over Republican challenger Edward Lynch. Ben Graber, a third-party candidate, received 6% of the vote in the race.

Congressman Jim McDermott has introduced several tax-related measures that serve as pieces of companion legislation to Frank’s HR 2046. The most recent bill, HR 6501, prescribes up to $40 billion in the 10 years following its passage to those who are in foster care or declining job markets for job training and educational purposes.

Congressman Pete Sessions (R-Tex), who represents the 32nd Congressional District of Texas, defeated Democratic challenger Eric Roberson by a 57% to 40% margin. Sessions has introduced HR 6663, which directed the Attorney General’s office to enforce the Unlawful Internet Gambling Enforcement Act by taking aim at online sports books only. These would become against the law if HR 6663 were passed.

Other members of the House of Representatives who sought re-election on Tuesday night, along with their grades according to the Poker Players Alliance Congressional Guide, where A+ is the best possible grade and F- is the worst, were as follows:

Bob Goodlatte (R-Va) – F-
Defeated Sam Rasoul 61% to 36%

Spencer Bachus (R-Ala) – F-
Ran Unopposed

Linda Sanchez (D-Cali) – A+
Defeated Diane Lenning 70% to 30%

John Conyers (D-Mich) – A+
Defeated two independent candidates 92% to 8%

Melvin Watt (D-NC) – A+
Defeated Ty Cobb 71% to 28%

Steve Cohen (D-Tenn) – A+
Defeated three independent candidates 88% to 12%

Bobby Scott (D-Va) – A+
Ran Unopposed

On September 29th, the Interactive Media Entertainment and Gaming Association (iMEGA) filed an appeal with the Third Circuit Court in a case to declare the Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional. This week, the U.S. Department of Justice filed its response with the Court. iMEGA now has 15 days to prepare a brief addressing the government’s document. Then, a three judge appeals panel will decide the future of the case surrounding the UIGEA, which was passed in October of 2006.

The response by the Federal Government attacks iMEGA’s assertion that the UIGEA is vague. The response by the Department of Justice reads, “The Act is in any event perfectly clear: It prohibits the knowing acceptance of financial instruments in connection with gambling when the bet in question is illegal in the place it was made or received.”

iMEGA Chairman Joe Brennan commented in a press release posted on the organization’s website, “We’re very confident, after reviewing the government’s brief, that we are on track for having this law overturned. 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.”

The lack of clarity as to what the term “internet gambling” means as it relates to the UIGEA has been the subject of a crusade by Congressman Barney Frank (D-MA), Chairman of the House Financial Services Committee. The Payments System Protection Act (HR 6870) and an accompanying amendment require that a list of activities be developed, including what is and is not legal under the law to make the UIGEA’s enforcement by the financial services industry straight-forward. As it currently stands, for example, industry experts may argue that online wagering on horse racing is legal in the United States, yet Frank stated in a Committee hearing that the answer ultimately depended on “which department you asked.” HR 6870 was passed out of Committee in early October.

The government’s brief asserts that iMEGA lacks standing to charge that the UIGEA violates privacy rights of individuals. In addition, the document claims that iMEGA cannot claim that the UIGEA is unconstitutionally vague because the organization “failed to advance this argument to the district court, either in its motion for injunctive relief or in its opposition to the government’s motion to dismiss.” Brennan added, “It’s hard to believe the government is making that claim, when Judge Mary Cooper herself preserved due process concerns in her decision.” The Third Circuit covers parts of Delaware, New Jersey, Pennsylvania, and New York.

Meanwhile, iMEGA and other organizations are squaring off against the Kentucky Justice and Public Safety Cabinet in Kentucky over the seizure and potential forfeiture of 141 internet gambling domain names, including those belonging to some of the world’s largest online poker rooms. The legal activities in the Commonwealth came after its Governor, Steve Beshear, ordered the seizure of the domain names, in his words, in order to “protect our people, especially our children, from this illegal and unregulated activity while also protecting our legal and regulated forms of gaming in Kentucky.”

iMEGA does not expect any complications arising from wagering legal battles on two different fronts. The Interactive Gaming Council (IGC) has also been heavily involved in Kentucky. Both the IGC and iMEGA recently filed petitions to the Kentucky Court of Appeals to intervene.

In a statement posted on its website on Friday, Lasseters Online Casino announced that it has shut its doors, effective immediately, after a decision from the Board of Directors of its parent company, Lasseters Corporation Limited (LCL). The site, which was opened in 1999, is currently in the process of granting withdrawals. All players with funds must submit their requests by Friday, October 24th.

A statement posted on the Lasseters Online Casino home page reads, “A review on the viability of the online casino operations was made and the Board of LCL is of the view that the ability of the online casino to turn around is very remote, despite continuous support from the parent company over the last two years. The online casino has suffered continuous losses and faces numerous constraints resulting in the company’s online casino not being able to remain competitive.”

The site officially closed down on Friday. However, access to account information remains available for players, who must submit all requests for funds by October 24th. If a player’s account balance is less than $25, he or she must e-mail support to process the withdrawal. ID verification is required as well, so players are advised to begin the process as soon as possible. Lasseters added, “From all of us here at Lasseters Online, this is a very sad day. We hope you have enjoyed the Lasseters Online site as much as we have enjoyed delivering our games and services to you, and would like to take this opportunity to express our sincere gratitude for your loyalty over the past 9 years.”

LCL also owns and operates AusVegas Casino. A similar message to the one found on Lasseters Online Casino appears on the front page of its website. Shares of the parent company are traded on the Australian Stock Exchange under the symbol “LAS.” Its official listing date was June 5, 2000 and the company is based in Fortitude Valley. Its Director and Chairman is Dato’ Jaya Tan, who has held the position since 2001. He is also the Vice Chairman of the Park Hyatt Saigan, a five star hotel in Ho Chi Minh City. Kamal Tan is LCL’s Non-Executive Director; he has also held that position since 2001.

E-Mail and customer chat support are available for players withdrawing from the site. Prior to the cessation of operations, Lasseters Online Casino offered Blackjack, Three Card Poker, Baccarat, Pontoon 21, Red Dog, and Snapjax. It also offered Keno, Roulette, and a cornucopia of slot machines. The Age, an Australian news outlet, noted that the Lasseters Sportsbook will remain in operation despite the closure of the casino arm.

Among the final slate of games to be introduced to the Lassters Online Casino were Banzai, Games Fever, Le Paris, and the Lost City of Atlantis. It was one of the oldest internet gambling sites in operation and employed the Orbis OpenBet platform.

The main issue, according to the company, was the enactment of the Unlawful Internet Gambling Enforcement Act in the United States, which occurred two years ago: “Following the announcement to the Australian Stock Exchange on September 9th, 2008, the Directors have taken the subsequent decision to cease the operations of Lasseters Online Casino due to our inability to compete and retain our market share since the closure of the U.S. market in October, 2006.” Several online poker sites, including Bodog, Full Tilt Poker, PokerStars, Ultimate Bet, and Doyle’s Room, continue to accept U.S. customers.

News flashed across the wires on Tuesday night that Senator Robert Menendez (D-NJ) had introduced S 3616, the Internet Skill Game Licensing and Control Act. The bill, according to its text, “provides for the licensing of Internet skill game facilities.” The bill, which provides for a full regulatory framework for skill games, is an important piece of legislation and the first introduced in the Senate. However, with the 2008 Congressional session quickly winding to a close, its future is up in the air.

The bill defines an “Internet skill game” to mean one “that uses simulated cards, dice, or tiles in which success is predominantly determined by the skill of the players, including poker, bridge, and mah jong.” This is one of the first bills to be released in the United States Congress that specifically identifies online poker. The Unlawful Internet Gambling Enforcement Act (UIGEA), for example, provides little direction as to what is legal and what is not.

In addition, S 3616 creates a regulatory and licensing framework that makes it “unlawful for a person to operate an Internet skill game facility in interstate or foreign commerce without a license issued to such person.” This imposes a harsh penalty on those who operate under the radar if S 3616 were to become law, but by the same token creates the procedures needed to obtain a license. The multi-page bill describes the criteria needed to be awarded a license as well as the information necessary for full disclosure of applicants, including detailed background checks.

S 3616 allows individual tribal lands and states to opt out if desired. Each entity has 90 days following the passage of the bill to do so. In addition, the bill clearly states that “No provision… may be construed to permit a bet or wager in connection with a sporting league or contest of a sporting league.” This is the third straight new bill to make it illegal to accept online wagers on sporting events. Pete Sessions’ HR 6663 clarified the UIGEA to state that it only applied to online sports betting. Barney Frank’s HR 2046 allowed sports leagues to opt out, although it was revealed in the House Financial Services Committee’s mark up hearing of the bill that the sports leagues themselves did not support it.

Each licensee is required to enact “reasonable safeguards” to ensure against underage gambling, betting in jurisdictions where it is illegal, tax evasion, fraud, money laundering, and problem gambling. Poker Players Alliance Chairman Alfonse D’Amato, himself a former three-term Republican Senator from New York, commented in a press release distributed on Wednesday,

This action by Senator Menendez is yet another example that prohibitions on Internet gambling, and specifically poker, will not work to protect consumers. The PPA has long advocated for thoughtful and effective licensing and regulation of online poker as a means to protect vulnerable communities, such as children and compulsive gamblers, and provide appropriate controls to thwart consumer fraud and abuse. Senator Menendez’s legislation is the right vehicle to achieve those goals.

Menendez was elected to office in 2006 after filling Jon Corzine’s seat earlier that year. The other elected Senator from New Jersey is Frank Lautenberg.

The 2008 Congressional session is quickly winding to a close. In fact, the targeted date of adjournment for the U.S. legislative body was last Friday, September 26th. However, with the recent financial difficulties in the United States, Congress remains in session prior to the general elections in November.

The Interactive Media Entertainment & Gaming Association (iMEGA) just filed a brief with the US Court of Appeals challenging the constitutionality of the UIGEA on the basis of it being “void for vagueness.”

iMEGA had already filed a suit against the UIGEA in March of this year with mixed results: although Judge Mary Cooper (US District Court, Trenton) dismissed the claim, she conferred the necessary legal status upon iMEGA so it could appeal or file claims against UIGEA. Judge Cooper’s final ruling in March stated:

The plaintiff’s claims express a fundamental disagreement with Congress’s judgment that Internet gambling should be controlled legislatively, and pose questions as to whether UIGEA, given its exceptions and conjectural enforcement problems, will be successful in accomplishing its desired ends. But it is not the Court’s role to pass on the wisdom of a Congressional act or speculative on its effectiveness.

Taking a clue from Judge Cooper’s statement, iMEGA decided to directly challenge the constitutionality of UIGEA, basing its claim on the flaw that most of the UIGEA’s detractors have pointed out: its vagueness. Joe Brennan Jr., iMEGA chairman and CEO, explained the main gist of their claim on a press release in the iMEGA website:

UIGEA should be “void for vagueness,” in that Congress has not defined what an “unlawful Internet gambling transaction” is, as they are required. Congress cannot delegate that necessary determination as to what is “lawful” or “unlawful” to US banks and credit card companies. The Department of Treasury, which has been tasked with drafting the regulations for UIGEA, has testified before Congress that they themselves cannot make that determination. Because Congress refused to draft necessary standards, the law is so inherently flawed as to make it totally vague and unenforceable, and we are confident that the Court will overturn it.

According to Wikipedia, “void for vagueness” is applied to a statute if it is so vague that people “of common intelligence must necessarily guess at its meaning and differ as to its application.” To determine whether a law is void for vagueness, courts may ask the following questions:

1. does the law give fair notice to those persons subject to it?
2. does the law guard against arbitrary and discriminatory enforcement?
3. can the law be enforced with sufficient “breathing room” for First Amendment rights?

To help the court answer those questions in the right way, iMEGA has invested in the best legal counsel they could afford: along with Eric Bernstein (lead counsel and noted First Amendment and Internet law attorney) and Edward Leyden (President and chief counsel for iMEGA) they recently drafted Stephen Saltzburg, Professor of Law at George Washington University and formerly Deputy Assistant Attorney General in the Criminal Division for the US Department of Justice and also Chairman of the American Bar Association’s Criminal Justice Section.

Leyden told Poker News Daily, “There is a point of departure from the approach were taking at the trial level. We’re now emphasizing the vagueness of the UIGEA. That’s the theme that runs through it and it’s unconstitutional because of it.”