Poker News

Update on Internet Gambling Legal Battles in Kentucky and Minnesota

With the 2009 World Series of Poker (WSOP) now just one week away, Poker News Daily sat down with Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan to discuss the future of online poker in Kentucky and Minnesota.

iMEGA must file its brief in the Kentucky case by June 1st. The squabble surrounds the seizure and potential forfeiture of 141 internet gambling domain names, including those belonging to industry giants PokerStars and Full Tilt Poker. Brennan told Poker News Daily that iMEGA’s brief will likely be filed before the June 1st deadline and hit the Kentucky Supreme Court’s desk sometime next week. A bevy of amicus briefs have also been submitted from organizations like eBay, the Electronic Frontier Foundation, the Center for Democracy and Technology, the American Civil Liberties Union, Network Solutions, and the Poker Players Alliance. iMEGA’s brief has been completed for two months. Brennan explained the logic in waiting to submit it: “We sat on it because we didn’t feel the need to give Commonwealth attorneys more time than necessary. They’ll get a chance to submit a rebuttal brief.”

In January, the Kentucky Court of Appeals overturned a lower court’s ruling and found that the Commonwealth did not have jurisdiction to seize the 141 domain names in question. The case has the potential to set considerable precedence regardless of how the Kentucky Supreme Court rules. On the State’s brief to its highest court, Brennan told Poker News Daily, “In our mind, they’ve broken no new ground. They haven’t strengthened their case at all. They are falling back on same arguments that were unsuccessful at the appellate level: We are bad people, we don’t deserve to be here, and sites don’t deserve to be represented by groups like iMEGA, which is simply an illegal internet gambling association.” If the State’s seizure and forfeiture are successful, the domain names in jeopardy would be inaccessible not only in Kentucky, but also around the world.

In Minnesota, the deadline is looming for 11 internet service providers (ISPs) to respond to the Minnesota Department of Public Safety. The government entity mandated that ISPs block access to 200 internet gambling domains, although not all of the sites in question accept customers from the United States. Brennan updated Poker News Daily readers on whether any ISP has responded: “Every one we’ve spoken to agrees that Minnesota lacks jurisdiction and authority under the Wire Act. At this time, they’re not going to reply.” iMEGA’s legal team has had extensive conversations with the Minnesota Attorney General’s office, which has agreed not to force responses from ISPs in the near future.

Brennan noted that discussions with the Attorney General’s office and Department of Public Safety in Minnesota have been anything but hostile: “They’ve acknowledged that there is some contention and they seem to be interested in getting things right. While we’re still on the other side of a contentious issue, they’ve behaved reasonably and professionally.” Brennan noted that John Willems, Director of the Department of Public Safety’s Alcohol and Gambling Enforcement Division, has likely never handled a high-profile internet case before. However, upon hearing that 200 sites may be censored, “the opposition moved at internet speed.”

No strict timeline has been given as to when we may see further developments in Minnesota. Two weeks ago, iMEGA filed a lawsuit against Willems in his capacity as head of the Alcohol and Gambling Enforcement Division. However, the organization is not rushing to seek a court order preventing a potential blockage from going into effect. Brennan explained, “We’re not all running to get in front of a Federal judge. Both sides will take a look at this and act in a reasonable timeline.”

Stay tuned to Poker News Daily for the latest from Kentucky and Minnesota.

iMEGA fights Minnesota block

The first part of the attack is informing ISPs that they don't have to comply with Minnesota's request to block sites.

On Tuesday iMEGA said it sent letter to the 11 Internet service providers that the Minnesota Department of Public Safety had ordered to block access to 200 online gambling Web sites alerting the ISPs that they don't have to comply with the order.

iMEGA followed that up by filing a lawsuit in the U.S. District Court in Minneapolis to prevent the DPS from enforcing an order to block state residents' access to the nearly 200 online gambling Web sites.

The lawsuit was filed against John Willems, director of the DPS Alcohol and Gambling Enforcement division, who initiated the move to have the online gambling sites blocked.

According to iMEGA, Minnesota lacks the authority to compel the ISPs to block residents' access to the sites. The association believes those actions are a violation of free speech rights guaranteed by the First Amendment of the U.S. Constitution.

"It's our hope that Minnesota will recognize their error and drop their blocking order," said Joe Brennan Jr., iMEGA chairman. "Censoring Internet access for Minnesota residents would establish a troubling precedent of government intrusion into the online world, and we just can't allow that to happen."

iMEGA also pointed out in its letters to the ISPs that the state had erred in its application of a federal law from the 1960s regarding the use of telephone and telegraph wires for the transmission of illegal wagers.

iMEGA believes that Minnesota has neither the authority or the jurisdiction to order the ISPs to block Minnesota residents access to sites that are not located within the state.

"Because Web site operators are not subscribers of yours, have no contracts with you and are not provided facilities by you, you should be aware the MN DPS is attempting to mislead (either intentionally or inadvertently) you into believing that you are bound by federal law to do what the MN DPS asks," iMEGA's letter stated.

"In fact, [the Wire Act] simply does not apply to the Web site operators and imposes no duty upon you and provides no authority to you to comply with the MN DPS request."

iMEGA isn't the only one fighting against the DPS. State Representative Pat Garofalo introduced legislation in the state Congress this week that would bar the DPS from forcing ISPs to block access to Internet gaming sites.

"The Department of Public Safety has to have better things to do with their time than to go after a college kid in his dorm room or some guy sitting in his basement spending a couple of hours playing online poker," Garofalo said.

"Demanding that a private-sector Internet service provider block access to Web sites is not a proper function of our state government."

The legislation would require prior legislative approval before the DPS could ask companies to block access to Web sites.

"I'm certainly not condoning online gambling, but I have serious concerns about government banning access to Web sites" Garofalo said.

Related Articles:

• Poker sites on Minnesota block list
• Minnesota attacks online gambling

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iMEGA Files Lawsuit Against Minnesota Department of Public Safety

In the wake of the order by the Minnesota Department of Public Safety calling for the blockage of 200 internet gambling websites, the Interactive Media Entertainment and Gaming Association (iMEGA) has filed a lawsuit.

The legal action was filed in the United States District Court in Minneapolis and lists John Willems, the Director of the Alcohol and Gambling Enforcement Division, as its defendant. Letters were sent by the Department of Public Safety to 11 of the country’s largest internet service providers (ISPs), including Charter, Comcast, and Qwest. Several of the ISPs in question offer multiple products, such as residential home telephone service, cell service, high-speed internet, and cable television; notably absent from those served was Time Warner. iMEGA’s lawsuit was officially entered on Wednesday and weighs in at 20 pages.

iMEGA Chairman Joe Brennan told Poker News Daily what the organization’s reasoning was for seeking legal action in the wake of the notices sent out by the Minnesota Department of Public Safety: “We’ve told the ISPs that the Department of Public Safety doesn’t have the authority to do this. The choke point is the Department of Public Safety. They have, in our opinion, exceeded their authority and jurisdiction. It makes sense to go to the source rather than betting on the goodwill of the ISPs.” In an interview with PocketFives.com, Poker Players Alliance Executive Director John Pappas noted that if an ISP complied with Minnesota’s censorship, they would be promptly sued by his organization. Brennan explained, “At this point, we’re not inclined to take any legal action against ISPs because they have not yet responded.”

The lawsuit filed on Wednesday notes that the internet permeates more than 150 countries worldwide. It also reminds readers that the Department of Public Safety generated the list of 200 sites randomly. Along with the domain name, the Department of Public Safety included each site’s IP address and telephone number in its letter to ISPs. Bodog, Full Tilt Poker, and Players Only headlined the list, which also included a bevy of rooms that do not accept U.S. players, including Titan Poker, Everest Poker, and Action Poker. Meanwhile, PokerStars, the largest online poker site in the world, was noticeably absent from prosecution.

iMEGA’s lawsuit notes that the State of Minnesota did not have jurisdiction to act because “none of the sites identified in the Defendant’s list are owned by entities within the jurisdiction of, or subject to prosecution by, the State of Minnesota.” The organization also claims that the Department of Public Safety’s actions constitute a breach of First Amendment rights under the United States Constitution. In the same count, iMEGA charges that the list of 200 sites “is under-inclusive because the Defendant has attempted to block access to only an ‘initial sample’ of about 200 sites even though, by his own admission… ‘thousands’ of such sites exist.”

The lawsuit adds that the State of Minnesota is in violation of the Commerce Clause of the United States Constitution. This portion of the legal action notes that areas outside of Minnesota will likely be affected. It asserts that censorship will “have a significant and irreparable harmful effect on interstate commerce by interfering with commercial and other speech of both Internet speakers and listeners, including Plaintiff and its members and their customers, beyond the borders of Minnesota.” iMEGA has used similar arguments in Kentucky, where the organization is seeking to overturn the actions of Governor Steve Beshear, who ordered the seizure of 141 internet gambling domain names, including those belonging to PokerStars, Full Tilt Poker, Ultimate Bet, and Doyle’s Room. iMEGA has until June 1st to file its brief with the Kentucky Supreme Court.

Brennan noted that significant monetary costs might deter the Department of Public Safety from pushing forward with its actions. He explained, “When we start including things like recouping legal fees into our lawsuit, it puts a dollar figure on it not only in repaying us, but also in defending the suit. It’s going to force them to make a decision on whether to commit resources to this effort. If they decide it’s not worth it, they might cut their order.”

We’ll have more for you on the Minnesota internet gambling battle right here on Poker News Daily.

Chris Wallace (Fox) Calls out Minnesota over Internet Gambling Ban

In the fight for the rights of online poker players in Minnesota, PokerXFactor.com instructor and St. Paul resident Chris “Fox” Wallace has taken a stand, calling for the Justice Department to arrest him if playing online poker is illegal.

Wallace’s actions follow written notice served to some of the country’s largest internet service providers (ISPs) such as Comcast, Charter, Qwest, and AT&T. The notices, which were authored by the Minnesota Department of Public Safety and received on Monday, call for 200 internet gambling websites to be inaccessible by the state’s residents. Appearing on the list of affected sites were U.S.-friendly rooms Bodog and Full Tilt Poker along with a bevy of online poker establishments that do not accept customers from the United States. The latter group includes Action Poker, CD Poker, Noble Poker, Mansion Poker, and Titan Poker. It also includes the title sponsor of the 2009 World Series of Poker (WSOP), Everest Poker, whose logos will don tables in the Amazon Room at the Rio for the second straight year. The Department of Public Safety is also calling for companies to block telephone access to the sites’ support numbers.

Wallace told his hometown newspaper, the Minneapolis Star-Tribune, last week, "I have e-mailed the Justice Department and I've volunteered to be arrested. I play online poker. Come and get it." He revealed that he faces a potential loss of $2,000 per week. If the ISPs successfully block the sites in question, he not only would potentially be unable to play online, but also would be barred from browsing any of the domain’s pages. David Axtell, an attorney at Leonard Street and Deinard in Minnesota, told the Star-Tribune, "This is an old law put in place before the Internet and there may be an argument that it doesn't cover Internet service providers.”

The law in question is the Wire Act, which was passed in 1961 and has historically applied only to online sports betting. Many question whether the age-old law is applicable to online poker, casino, and Bingo games; each genre of internet gambling had sites appear on the list of 200 released last week. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan questioned the Government’s professionalism in generating its list. According to a statement found on iMEGA’s website, Brennan explained, “We question how much thought was put into the selection of these sites. To propose censoring Minnesota residents’ Web access and not to know which sites are even in the U.S. market makes me wonder just how seriously the Department of Public Safety is taking this action. It comes off as a half-baked attempt at intimidation rather than thoughtful enforcement.” The list of 200 was generated randomly without regard to what type of internet gambling each site was engaged in.

Other websites that are affected include Betfred, Betway, Bet U.S., Crazy Poker, Euro Poker, Gnuf’s online casino arm, Hollywood Poker, Intertops Casino, Players Only, Total Poker, Ladbrokes Casino, and Party Casino. Publicly traded companies on the London Stock Exchange own the latter two sites. At the time of writing, neither had written statements about the Minnesota internet gaming issue given to the Exchange. Party Gaming entered into a non-prosecution agreement with the U.S. Government last month and agreed to pay a $105 million fine. In the process, it admitted to processing transactions from U.S. customers using third parties, which was “contrary to certain U.S. laws.” Upon passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, Party Gaming exited the market.

ISPs have up to three weeks to respond to the Minnesota Department of Public Safety. The state has legalized Indian casinos, card rooms at horse racing tracks, and a lottery that features second chance drawings online. Next week may see Congressman Barney Frank (D-MA) introduce legislation to clarify or overturn the UIGEA. The bill, which was originally scheduled to be introduced in March, may outline a complete licensing and regulatory framework for the industry similar to last Congressional session’s HR 2046, the Internet Gambling Regulation and Enforcement Act.

Poker sites on Minnesota block list

Sites on the list include Full Tilt Poker, CD Poker, Bodog Poker, Titan Poker, Everest Poker, Hollywood Poker and Players Only Poker.

However, major players like PokerStars, Absolute Poker and Ultimate Bet remain off.

While a few of the poker and casino sites that make up the 199-site list are big names in the online gambling industry, most are very small sites.

Some, the Interactive Media Entertainment & Gaming Association claims, don't even take U.S. business.

"We question how much thought was put into the selection of these sites," said Joe Brennan Jr., iMEGA chairman.

"To propose censoring Minnesota residents' Web access and not to know which sites are even in the U.S. market makes me wonder just how seriously the [Department of Public Safety] is taking this action. It comes off as a half-baked attempt at intimidation rather than thoughtful enforcement."

When asked how the sites were chose, John Willems, director of the DPS Alcohol and Gambling Enforcement Division, told PokerListings "The sites were chosen at random without regard to type of gambling or location."

However, iMEGA found it interesting to note that BetUS.com is on the list, a site that at one time had an endorsement deal with former Minnesota Governor Jesse Ventura.

iMEGA stepped in on the case in Kentucky when that state tried to seize 141 Internet gambling-related domain names they considered to be illegal. The organization has also been defending online gambling at the federal level filing a lawsuit against the UIGEA.

It's likely iMEGA will be willing to take on Minnesota as well, considering the organization's concern that the ban signals a new form of government censorship that could stretch well beyond Internet gambling.

"When Mr. Willems expresses his intention to extend his 'program' to thousands of other sites, just what kind of sites will he be targeting?" Brennan asked.

"And will he be making the determination which sites are 'legal' and which are 'illegal'? Because as far as we can tell, there is nothing in Minnesota or U.S. Federal law that makes these gaming or any other sites illegal, just their opinion."

The Wire Act of 1961 made it illegal to use telephones or telegraphs to transmit wagers. The U.S. Congress has taken up the matter a number of times since, but has yet to amend the law to include Internet gambling.

Congress also passed the UIGEA, making money transfers from banks and other financial institutions to online gambling sites illegal. But even the UIGEA does not outlaw the actual act of gambling online.

"What is most concerning is the shaky legal pretext that Minnesota has used to fashion their order," Brennan said.

"There is simply no Federal law that exists that makes it illegal for US citizens to gamble on the Internet. None."

Related Article: Minnesota attacks online gambling

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List of 200 Banned Internet Gambling Sites in Minnesota Released

The list of 200 internet gambling sites that have come under fire by the Minnesota Department of Public Safety has been released. Many of the websites identified do not accept players from the United States, leaving leaders in the industry scratching their heads.

Headlining the contingent of targeted sites is Party Casino, which is owned by the same publicly traded parent company as its online poker room counterpart, Party Poker. Neither accepts U.S. players and to complicate matters further, Party Gaming, which can be found on the London Stock Exchange under the symbol “PRTY,” recently reached an agreement with the U.S. Department of Justice admitting to Wire Act violations similar to one struck by company co-founder Anurag Dikshit in December. Party Poker is not on the list. Also appearing is PokerRoom, which shut its doors earlier this month along with sister site CasinoRoom (which is also on the list) and funneled customers to bwin.

Bodog appears on the list as “BoDog.com,” but the corresponding URL points to its casino arm. Bodog accepts players from the United States, as does Full Tilt Poker, whose domain is officially under fire by the Minnesota Department of Public Safety. Cake Poker Network site Players Only also is part of the group of 200 affected sites. Notably absent are PokerStars, Ultimate Bet, Absolute Poker, Lock Poker, Carbon Poker, Doyle’s Room, and Cake Poker. No informational or forum sites appear to be targeted at the moment. The list spans genres such as online poker, online casinos, and online sports books.

The Action Poker Network’s flagship site appears on the list, as does Titan Poker, one of the largest sites on the massive iPoker Network. Neither site accepts U.S. players. Fellow iPoker Network site Betfred’s future may now be in jeopardy, as is the longevity of Microgaming site Betway. iPoker Network sites CD Poker, Mansion Poker, and Noble Poker all appear on the list of 200 sites. One of the most visible rooms to find itself in hot water is Everest Poker, which is the official sponsor of the 2009 World Series of Poker (WSOP), which kicks off next month from the Rio in Las Vegas. This is Everest Poker’s second year as the spectacle’s presenting sponsor. Its logo will don WSOP felts and also appear in signage at the Rio.

Other websites that have been flagged by the Minnesota Department of Public Safety include Gnuf, Golden Palace, Hollywood Poker, and InterTops Casino, which actually appears twice on the list. Publicly traded company Ladbrokes’ online poker site, despite not accepting U.S. players, is on the list, as are PokerRoom School, River Belle, and Spin Palace. Crazy Poker’s dot com and U.K. domain names are both listed. According to Alcohol and Gambling Enforcement Division Director John Willems, the list of 200 sites was drawn “randomly” without regard to the type of internet gambling employed.

The Interactive Media Entertainment and Gaming Association (iMEGA), which has been at the forefront of the fight for the industry in Minnesota, was puzzled by the final list distributed by the Department of Public Safety. Joe Brennan, its Chairman, commented in a press release on the organization’s website, “We question how much thought was put into the selection of these sites. To propose censoring Minnesota residents’ Web access and not to know which sites are even in the U.S. market makes me wonder just how seriously the Department of Public Safety is taking this action. It comes off as a half-baked attempt at intimidation rather than thoughtful enforcement.”

The ISPs that received notice have up to three weeks to respond. They include some of the largest telecommunications corporations on the planet: Verizon, AT&T, Qwest, and Direct TV, just to name a few. The letter sent to each ISP reads, “We are therefore requesting these enterprises not be allowed to transmit gambling information to your Minnesota customers.” The letter also states that the Federal Communications Commission (incorrectly labeled as “Federal Communication Commission”) received a copy. Each gambling site is listed alongside its IP address and telephone number, although the latter is not present for every site on the list. The Department of Public Safety is also calling for telephone access to be blocked where appropriate.

View the entire list of 200 internet gambling sites in jeopardy in Minnesota.

Minnesota Seeks to Block Internet Gambling Sites

Fresh off a similar incident that has been appealed to the Kentucky Supreme Court, the Minnesota Department of Public Safety has notified internet service providers (ISPs) that they must prevent access by the state’s residents to 200 internet gambling sites.

The total number of sites to be blocked currently stands at 200. However, at press time, the affected domain names are not yet known. According to the internet gaming press release, Written notice was given by the Minnesota Department of Public Safety’s Alcohol and Gambling Enforcement Division to AT&T, Charter, Comcast, Direct TV, Dish Network, Embarq, Sprint, Frontier Communications, Qwest, Verizon, and Wildblue Communications. John Willems, Director of the Division, commented in a press release distributed on Wednesday, “We are putting site operators and Minnesota online gamblers on notice and in advance. Disruption of these sites’ cash flow will negatively impact their business models. State residents with online escrow accounts should be aware that access to their accounts may be jeopardized and their funds in peril.”

The press release cites the Wire Act of 1961 and overtly charges, “Online gambling is illegal in all U.S. states.” The Interactive Media Entertainment and Gaming Association (iMEGA) has already dispatched a legal team specializing in First Amendment rights to Minnesota to combat the Department of Public Safety. Its Chairman, Joe Brennan, told Poker News Daily, “I'm somewhat troubled by the shaky legal premise on which Minnesota has based this order. They are asserting that there is some blanket Federal prohibition against gambling on the internet, when in fact none exists. In a similar fashion to Kentucky, you have the aggressor citing assertions that are not supported by the laws that are on the books.”

The letters to ISPs were delivered on Monday. The companies have “two to three” weeks to respond. Then, the Department of Public Safety has pledged to take the complaint to the Federal Communications Commission. In addition to the 200 sites whose access may be at risk in the immediate future, the Division expects further expansion: “Willems anticipates the program expanding to address thousands of sites, depending on compliance.” In Kentucky, a total of 141 domain names are in limbo as part of a forfeiture hearing that may be heard by the Kentucky Supreme Court. In Minnesota, no such seizure occurred. Instead, the Department of Public Safety is merely seeking that ISPs block access. Internet gambling is identified specifically.

In addition to their websites being inaccessible, the Department of Public Safety is also calling for the 200 companies’ phone numbers to be blocked. It explained, “For more than two decades, telecoms have shut down telephone numbers at the request of law enforcement agencies when believed to be involved in illegal activities, such as sports book-making telephone numbers.” iMEGA and the 1.2 million member strong Poker Players Alliance (PPA) are among those seeking to prevent the blockage from becoming a reality. In Kentucky, the American Civil Liberties Union (ACLU) and Bluegrass Institute rallied behind the internet gambling industry. In January, the Kentucky Court of Appeals in Louisville overturned a lower court ruling that upheld the seizure order by a two to one margin. The Commonwealth, led by Justice and Public Safety Cabinet J. Michael Brown, immediately appealed.

Matt Werden, the PPA’s State Director for Minnesota, commented in a press release on Wednesday, “This isn’t simply a heavy-handed tactic by the government; this is a clear misrepresentation of Federal law, as well as Minnesota law, used in an unprecedented way to try and censor the Internet. I don’t know what U.S. Code they’re reading, but it is not illegal to play this great American pastime online and we’re calling their bluff.”

Grover Norquist, President of the Americans for Tax Reform, added, “This is nanny-statism at its worst – the government barging into a private matter because people are supposedly too stupid to make decisions and take care of themselves. Individual liberty should not be supplanted by the whims of politicians looking to soak even more money from an over-taxed, over-regulated population while feigning concern over safety issues.” Brennan told Poker News Daily that early speculation revealed that pressure from Indian casinos may be behind the move, although this was not verified. PokerXFactor.com instructor and Minnesota resident Chris “Fox” Wallace speculated that fledgling legal card rooms at racetracks may be to blame.

Willems admitted to the Minneapolis Star Tribune that he did not know how many Minnesota residents gambled online nor provided an estimate. Instead, he stated that he has had gamblers claim they lost $200,000 and needed to borrow money. The Department of Public Safety’s press releases closes by asserting that the internet gambling industry may provide “funding for criminal and terrorist organizations.”

A call placed to press release author Dennis Smith of the Minnesota Department of Public Safety was not returned as of press time. Stay tuned to Poker News Daily for the latest on this developing story.

iMEGA UIGEA Appeal to be Heard on July 6th

In breaking news out of the United States, it was revealed that the Third Circuit Court of Appeals will hear lawyers from the Interactive Media Entertainment and Gaming Association (iMEGA) argue why the Unlawful Internet Gambling Enforcement Act (UIGEA) is unconstitutional.

Last March, Judge Mary L. Cooper granted the organization standing to sue on behalf of the internet gambling industry. However, she disagreed with many of iMEGA’s arguments in the process, prompting the appeal. In a letter from the Third Circuit Court of Appeals, its clerk informed the parties involved that the case has “been tentatively listed on the merits on Monday, July 6, 2009 in Philadelphia [Pennsylvania]. It may become necessary for the panel to move this case to another day within the week of July 6, 2009. Counsel will be notified if such a change occurs.” Further information will be given as to whether oral arguments will be heard, and if so for how long, within one week of the disposition date.

Within seven days, iMEGA and attorneys for the U.S. Department of Justice must advise as to who will serve as counsel in the proceedings on July 6th. Each party must also identify whether its attorney is a member of the bar of the Court. iMEGA Chairman Joe Brennan is looking forward to the organization’s day in court, which is now just two months away. He told Poker News Daily, “The court is going to look at the entire case without technicalities and filing dates. They are going to solely decide it on the merits, not based on anything political or regarding procedure. That’s why you have a judicial system.”

iMEGA is in the midst of a spat with the Federal Government over whether information on the North Dakota and New Hampshire lotteries should be included in the record. Since its brief was filed, iMEGA has learned that customers trying to purchase legal lottery tickets with credit cards are being blocked from doing so. State lotteries have a specific carve-out from the UIGEA. The issues have arisen apparently due to the onset of the UIGEA regulations, which were enacted on January 19th and command full compliance by the financial services industry by December 1st. The regulations have caused Visa and MasterCard to engage in over-blocking rather than risk breaking the law.

The Department of Justice claims that because the new information was not filed by the proper deadline in iMEGA's brief, it should not be included in the record. Also absent from iMEGA’s official brief are the final regulations of the UIGEA, which were accepted by the White House Office of Management and Budget (OMB) in November as so-called “midnight rules.” Brennan told Poker News Daily why the request to supplement the record might be taken seriously by the Court of Appeals: “They are aware that their decision is going down in the history books. They know, we know, and the Department of Justice knows that not accepting our information may be grounds for an appeal.” If unsuccessful, iMEGA could appeal once again to the Third Circuit or seek the intervention of the U.S. Supreme Court.

Originally, the Third Circuit had asked iMEGA for its availability this month for oral arguments. On the two month delay, Brennan speculated, “It tells me that the Court is giving the case more serious consideration than a lot of people thought they were.” There has been no indication as to when the Court of Appeals will decide the future of iMEGA’s request to supplement the record. The case is numbered 08-1981 and is entitled “iMEGA v. Attorney-General USA, et al.”

iMEGA is also a leading party in the case pitting the Commonwealth of Kentucky’s Justice and Public Safety Cabinet against the owners of 141 internet gambling domain names, which risk forfeiture. iMEGA has until June 1st to file its brief in the case.

BetOnSports Ex-CEO David Carruthers Pleads Guilty

In breaking news out of St. Louis, former BetOnSports CEO David Carruthers has pled guilty to “federal racketeering conspiracy charges,” according to the Associated Press. He faces up to 33 months in prison and sentencing is scheduled for October 2nd.

According to a statement released by iGamingNews on Wednesday, “Mr. Carruthers agreed to not appeal provided that the sentence doesn't exceed 33 months, which is under the terms of the agreement, as well as to not engage in offshore gambling businesses during the time of supervised released or thereafter.” Carruthers also agreed to cooperate against BetOnSports founder Gary Kaplan and others still in custody.

Carruthers has been under house arrest since 2006 and even ran the St. Louis Marathon during his detention, posting a time of four hours, five minutes, and 27 seconds. He was originally detained in Texas while in transit from the United Kingdom to Costa Rica before being moved to St. Louis. According to the St. Louis Post Dispatch newspaper, despite believing that internet gambling and sports wagering may have been illegal in the United States under laws such as the Wire Act of 1961 and Unlawful Internet Gambling Enforcement Act (UIGEA), Carruthers “continued to advertise to U.S. customers that the company was 'legal and licensed' while 'furtively or covertly' collecting bets and paying out money owed to gamblers.”

Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan speculated as to why Carruthers would finally plead guilty, ending the three year ordeal. He told Poker News Daily, “Carruthers is a citizen of the United Kingdom and isn't a resident of the United States. He was a foreign national that had been detailed in transit. He went three years trying to make the best of a bad situation and wants to go home.”

In July of 2006, Carruthers was fired as CEO of BetOnSports. The company stated at the time, "Clearly, while he remains in the custody of the U.S. government, he is unable to perform his duties.” In August of that year, the company vacated the U.S. market entirely, two months prior to then-President George W. Bush signing the SAFE Port Act and its accompanying UIGEA rider into law. Brennan noted that while BetOnSports was navigating its future business plans, Carruthers was still held up in Missouri: “The U.S. Government won a war of attrition. He's an older guy who hasn't been home in three years. He was under house arrest with no trial.”

The admission of guilt comes on the heels of a plea bargain made by former Party Gaming Co-Founder Anurag Dikshit in a New York court room last December. Dikshit agreed to pay $300 million over three installments and faces up to two years in prison. However, his sentencing has been delayed until December of 2010. Comparing the two high profile internet gambling proceedings, Brennan explained, “Carruthers' case is obviously more severe than Anurag's, who is free to go wherever. It's disappointing to see a guy who has been standing on his principles beaten down enough to forge a plea.”

Visiting BetOnSports.com from the United States yields the text, “This website does not accept wagers on sports or sporting events from persons in the United States. It is a violation of United States Law to transmit sports wagers or betting information to this website from the United States.”

We'll have more for you on this breaking story has it develops right here on Poker News Daily.

New NFL Lobbyist Seeks to Protect UIGEA

Recently, the National Football League (NFL) enlisted the services of Jeff Miller, who will serve as its chief lobbyist on Capitol Hill. According to an article authored by the Associated Press, Miller seeks to preserve the ban on internet gambling in the United States.

In 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was ushered through Congress at the last minute by former Senate Majority Leader Bill Frist (R-TN). Although the UIGEA did not define what was legal and illegal under its jurisdiction, its effect was driving some of the world's largest online poker sites out of the U.S. market. Now, only a handful of rooms, such as PokerStars, Full Tilt Poker, Ultimate Bet, and Carbon Poker, accept U.S. residents. In addition, the UIGEA also eradicated payment processors such as Neteller and Citadel Commerce from the market.

On January 19th, the regulations of the UIGEA finally came to fruition as “midnight rules” passed by the outgoing Bush Administration. Many in the internet gambling industry questioned the role of Special Assistant to George W. Bush William Wichterman, who had also served as an NFL lobbyist. Whether the urging of Wichterman resulted in the UIGEA's regulations being pushed through remains unknown. However, his involvement prompted a letter by Congressman Steve Cohen (D-TN).

The NFL's newest hire, Miller told the Associated Press, "I'm a lifelong NFL fan, grew up in Wisconsin, [and] rooted for the Packers at my father's knee every Sunday. I had had opportunities in the past to leave the Hill and do other things, such as work at a law firm and lobby firm. But when the NFL calls, you can't turn that down." When asked about the upholding the existing internet gambling legislation, which consists of both the UIGEA and Wire Act of 1961, Miller responded, "We want to maintain the integrity of the game, and gambling threatens that."

The Associated Press article added that Miller will be at the forefront of sports leagues' efforts to preserve the status quo with regards to internet gambling. Congressman Barney Frank (D-MA) has led the effort to overturn the UIGEA, or at least clarify it for the benefit of the financial services industry. HR 6870, the second version of the Payments System Protection Act, was passed out of the House Financial Services Committee, of which Frank is the Chair, by a 30-19 vote last September. However, due to the then-emerging economic crisis in the United States, it did not see time on the House floor.

According to the Associated Press, the NFL previously sought outside counsel. Miller's hiring bucks that trend. He explained, "The emphasis is to have a full-time person spending every waking moment thinking about how what Congress or the administration is doing is going to affect the NFL's business model." The NFL held its annual owners' meetings last week in California, instituting a number of rule changes as well as adjusting the draft order based on a team's finish in the playoffs. Fantasy sports received a specific exemption from the UIGEA, although the law forced industry websites to guarantee prize pools and not allow a manager to have all of his players come from the same team.

Joe Brennan, Chairman of the Interactive Media Entertainment and Gaming Association (iMEGA), told Poker News Daily why sports betting has received such a bad rap: “It's the only type of betting where the courts have been explicit. The Wire Act arose out of a couple of sports betting scandals back in the 1950s. It always comes back to trying to protect the integrity of the game.” iMEGA is suing to declare the Professional and Amateur Sports Protection Act (PASPA) unconstitutional. The case has been assigned to Chief Judge Garrett E. Brown, Jr. of the New Jersey District Court.