So, Can We or Can't We?

Online gambling in the United States has been in limbo since the fall of 2006, when the Unlawful Internet Gambling Enforcement Act (UIGEA) went into effect. The Act banned financial institutions in, or operating in, the US, from conducting transactions between American accounts and online gambling venues. For a time, it effectively stifled the American online gambling market.

The UIGEA was quickly opposed, and not just by the gambling industry or the banks. Civil libertarians viewed, in many cases, as a threat to personal privacy, and good government advocates disliked the Act's ambiguous language. Online gamers quickly found ways to circumvent the provisions of the Act, and the American Internet gambling market has been making a slow comeback. In Congress, there is currently legislation pending to repeal the controversial UIGEA.

All of this is fine, but the UIGEA is still the law of the land; it still prevents in legalized gambling online in the US, and it still hobbles the industry's largest potential market. It's possible that the end is in sight, however.

The biggest challenge
Earlier this year, a Federal Circuit Court Judge gave the Internet Media and Gambling Association (iMEGA), a trade group of industry insiders formed to combat the UIGEA, standing to sue the government for repeal of the new law. The case, when it is filed, will go to the 3rd Circuit Court of Appeals, one level below the US Supreme Court in the judicial system.

Receiving the standing to sue means that iMEGA is recognized as having an interest in the issue, and a potentially valid legal case. The ruling that iMEGA can initiate a court action brought with it a deadline, at the end September, by which time the organization must file a brief with the Court declaring their intent to sue. iMEGA has stated that they will do this.

The next step
Once intent is declared, the defendant, in this case, the Federal Government, will have an equal amount of time to prepare its own brief to the Court, outlining its defense. The Court will then review the briefs, and accept so-called amicus briefs, or evidentiary statements by other interested parties, before announcing a three judge panel that will hear the trial.

iMEGA expects that this issue will not be resolved until the end of 2009, at the earliest. In cases like this, involving complex laws and potentially deep Constitutional issues (how much right do we have to privacy in online banking?), just the preliminary steps, outlined above, can take a year or more. The trial itself will take at least as long, and probably longer. A lot of eyes will be keeping a close watch on this matter as it unfolds.