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Gaming Association Sues U.S. Over Internet Gambling Ban

The Interactive Media Entertainment & Gaming Association is suing to stop enforcement of the Unlawful Internet Gambling Enforcement Act of 2006.
A New Jersey lawyer has filed a lawsuit on behalf of a new gaming association that's challenging the U.S. ban on Internet gambling.

Eric M. Berstein filed a complaint on behalf of the new Interactive Media Entertainment & Gaming Association (iMEGA) in U.S. District Court in New Jersey this week. The lawsuit targets U.S. Attorney General Alberto Gonzales, the Federal Trade Commission, and the Federal Reserve, and seeks a judgment to stop enforcement of the Unlawful Internet Gambling Enforcement Act of 2006.

The act imposes civil and or criminal penalties for banks, credit card companies, and others who process payments to gambling Web sites from Americans. Bernstein argues that the law violates U.S. citizens' constitutional rights and sets a dangerous precedent for Web commerce by criminalizing the transfer of funds if the end result is illegal.

"The purpose of the Unlawful Internet Gambling Enforcement Act is to prevent Americans from engaging in their fundamental rights to conduct their lives in the manner they wish to live it -- to be free from the government imposing public morality in the privacy of one's home," Bernstein said in a statement.

In stating his argument on behalf of iMEGA, Bernstein points out the recent World Trade Organization ruling that found the United States in contempt of treaty obligations because of the Internet gambling ban. The U.S. government plans to alter its treaty obligation rather than appeal the ruling, which allows sanctions against the United States.

iMEGA formed as a not-for-profit trade organization this year. The group has stated that its goals are to work with government, corporations, and citizens for "rational governance of interactive Internet commerce and communications" to promote innovation, Internet growth, openness, and freedom.

iMEGA President Edward Leyden said he hopes the lawsuit will encourage regulation and taxation of Internet gaming instead of a blanket ban.

"As with the U.S. financial markets, transparency assures that broad access to relevant data and the balancing forces of a free market all operate to maintain fairness and prevent corruption," Leyden said in a statement. Similarly, in this age of a yawning federal "tax gap," U.S. taxation of Internet gaming transactions and companies could generate, more than $20 billion during the next several years -- all while saving federal law enforcement dollars for the fight against terrorism and other dire issues."