Good News and Bad News for Poker Players: UIGEA Upheld by Court

When US 3^rd District Court judge, Dolores Slotiver, handed down her ruling that UIGEA legislation would be upheld, it seemed like a bitter pill to swallow for poker players. However, a closer look at the ruling may show a different side to the story:

“It bears repeating that the Act itself does not make any gambling activity illegal… Whether the transaction…constitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e. if it is illegal under that state’s law, it constitutes ‘unlawful Internet gambling’ under the Act.”

So, even though they lost the case, the Interactive Media Entertainment and Gaming Association (iMEGA) sees the ruling as both a setback to the legalization of online poker, and also as a minor victory: A victory that may be just enough to get the ball rolling toward the ultimate goal of a legalized and regulated online poker industry.

iMEGA originally brought the case to court challenging the constitutionality of the Unlawful Internet Gambling Enforcement Act passed in 2006. iMEGA was challenging the law’s constitutionality on a number of fronts: vagueness, privacy infringement, 1^st Amendment issues, and violation of WTO treaties.

The court’s ruling was that UIGEA enforcement is dependent on the state’s laws regarding the legality of Internet gambling. This is where the ruling may be good news for online poker players: At the moment just six states have laws forbidding online gambling.

Additionally, during the current recession many states are looking for new ways to produce revenue, and legalizing online gambling may be just what the doctor ordered for their budget deficits. The ruling handed down by Judge Dolores Sloviter, gives states the ability to pass legislation legalizing Internet gambling at their discretion.

*At least two states, California and Massachusetts, have already attempted to place legalized online poker initiatives on their upcoming ballots. In Massachusetts the measure failed to meet the necessary criteria for inclusion, and in California proponents are waiting until January 1^st before renewing their campaign for legalized and regulated online poker.

The fact that states have already begun contemplating these initiatives so soon after the court ruling is a great sign for future proposals. It appears that legislators are finally coming to the realization that online gambling can add a lot of money to their coffers, and poses no more risk than land-based casinos -which are now popping up all over the United States, and are no longer isolated in a single town in Nevada and New Jersey.

So, while online poker is still entangled in a legal gray-area, the good news is that it has not been criminalized outright, and the courts are getting closer and closer to forcing a decision to be made by federal lawmakers to legalize and regulate the industry.

*There are currently two separate Internet gambling bills waiting votes in Congress: A bill submitted in the House of Representatives by Barney Frank (D-MA) seeks to legalize and regulate the entire Internet gambling industry (with the exception of sports-betting). Frank also submitted a second bill that would repeal the UIGEA legislation passed in 2006. The second bill was introduced in the Senate by Robert Menendez (D-NJ), the Menendez bill aims to legalize and regulate online games of skill only, which would include poker.