When an appellate court finally grants a conservative verdict, the Obama Administration then takes away the benefit. The Court of Appeals for the Third Circuit upheld the Unlawful Internet Gambling Enforcement Act of 2006, a federal law that bans internet gambling activity in a state where such activity is already illegal. Interactive Media Entm't & Gaming Ass’n v. AG of the United States, 580 F.3d 113 (3rd Cir. Sept. 1, 2009). But the Obama Administration subsequently chose not to enforce the law, at least not for now.

Internet gambling is a billion-dollar business, and the gambling industry threw everything into trying to stop it from becoming law. After it passed, an association for the industry sued to block its implementation. The plaintiff argued that this law was unconstitutional for vagueness, insisting even that the title phrase “Unlawful internet gambling” was itself too vague. But since the law affects only those states where internet gambling is already illegal, this challenge was absurd.

Writing for the Court, Judge Dolores Sloviter dismissed this facial challenge and upheld the law. The phrase “unlawful internet gambling” is well-defined in the statute: “To place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.” 31 U.S.C. § 5362(10)(A).

Plaintiff also alleged that the law violated the First Amendment. But the Court held that the law does not “have any adverse impact … on the ability of the plaintiff … to express their views on Internet gambling.” Moreover, the Court held that financial transactions are not “speech” anyway.

Plaintiff further insisted that in many cases it would be difficult to determine from which jurisdiction a bet is made, and thus whether it is legal or not under local law. But the Court tossed out that argument, noting that “[w]hat renders a statute vague is not the possibility that it will sometimes be difficult to determine whether the incriminating fact it establishes has been proved; but rather the indeterminacy of precisely what that fact is.”

The Court held that if challenges are to be made against gambling laws, they should made against the laws on which the Unlawful Internet Gambling Enforcement Act of 2006 rests - that is, the state and federal laws which actually criminalize internet gambling. According to both the District and the Court of Appeals, this Act as written is constitutional, and not overly vague.

But, alas, the Obama Administration subsequently postponed implementation of this good law, giving time for liberal Congressman Barney Frank to try to repeal it. The Obama Administration released a statement in late November that the date of implementation will be postponed from December 1 until at least June 1, 2010. Ante up!