Published on Monday, September 24, 2007
By Lorraine Woellert
WASHINGTON, USA (Bloomberg): The Bush administration for the second time has asked a court to throw out a legal challenge to a 2006 online gambling law, setting the stage for a court test before strict new regulations go into effect.
In a brief filed in federal court in Newark, New Jersey, the Justice Department urged US District Judge Mary Cooper to reject a gambling industry motion to block the law before it goes into effect. Cooper will hear arguments in the case on September 26.
The Justice brief said the trade group that filed the lawsuit has no right to bring the case. It also said the group's claim is based on "rank speculation" and draws premature conclusions because the federal government has yet to issue regulations implementing the law, which Congress passed in October 2006.
The plaintiff relies on "mischaracterizations" and "misapplications," the Justice Department wrote.
The law being challenged, the Unlawful Internet Gambling Enforcement Act, makes it a crime for banks or other institutions to process financial transactions, such as electronic fund transfers, that are used to place bets online.
The Interactive Media Entertainment and Gaming Association, or iMega, filed a suit in June challenging the law's constitutionality. IMega, which represents the online gambling industry, says some of its members face "imminent financial ruin" if the law is enforced.
The trade group's suit says the law violates the privacy rights of online gamblers and operators of the websites. The act also would criminalise activity by companies that operate legally in their home countries, such as the United Kingdom and Antigua and Barbuda, iMega says.
"The action of gambling in private on the Internet is protected by First Amendment privacy concerns," the suit says.
The Treasury Department and the Federal Reserve are still drafting regulations to implement the law, having missed a July 20 deadline.
PricewaterhouseCoopers LLP estimates that global Internet gambling is a $144 billion industry.
By Lorraine Woellert
WASHINGTON, USA (Bloomberg): The Bush administration for the second time has asked a court to throw out a legal challenge to a 2006 online gambling law, setting the stage for a court test before strict new regulations go into effect.
In a brief filed in federal court in Newark, New Jersey, the Justice Department urged US District Judge Mary Cooper to reject a gambling industry motion to block the law before it goes into effect. Cooper will hear arguments in the case on September 26.
The Justice brief said the trade group that filed the lawsuit has no right to bring the case. It also said the group's claim is based on "rank speculation" and draws premature conclusions because the federal government has yet to issue regulations implementing the law, which Congress passed in October 2006.
The plaintiff relies on "mischaracterizations" and "misapplications," the Justice Department wrote.
The law being challenged, the Unlawful Internet Gambling Enforcement Act, makes it a crime for banks or other institutions to process financial transactions, such as electronic fund transfers, that are used to place bets online.
The Interactive Media Entertainment and Gaming Association, or iMega, filed a suit in June challenging the law's constitutionality. IMega, which represents the online gambling industry, says some of its members face "imminent financial ruin" if the law is enforced.
The trade group's suit says the law violates the privacy rights of online gamblers and operators of the websites. The act also would criminalise activity by companies that operate legally in their home countries, such as the United Kingdom and Antigua and Barbuda, iMega says.
"The action of gambling in private on the Internet is protected by First Amendment privacy concerns," the suit says.
The Treasury Department and the Federal Reserve are still drafting regulations to implement the law, having missed a July 20 deadline.
PricewaterhouseCoopers LLP estimates that global Internet gambling is a $144 billion industry.
