Third Circuit Upholds Online Gambling Ban

Sloviter disagreed, saying there was nothing in the law “to suggest that Congress meant anything other than the physical location of a bettor or gambling business” in the definition of “unlawful Internet gambling.” “To the extent that Interactive's hypothetical raises a vagueness problem, it is not with the act, but rather with the underlying state law,” Sloviter wrote in an opinion joined by Judges Thomas L. Ambro and Kent A. Jordan.

“It bears repeating that the act itself does not make any gambling activity illegal,” Sloviter wrote. “Whether the transaction in Interactive's hypothetical 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.”

In the final pages of the decision, Sloviter also rejected the argument that the UIGEA violates a gambler's constitutional privacy rights. To the contrary, Sloviter found, the act of gambling ' even in the privacy of one's own home ' is not protected by any privacy right found in the U.S. Constitution. In making the privacy argument, Sloviter said, the plaintiffs relied primarily on two cases that dealt with the right to privacy in sexual matters ' the U.S. Supreme Court's 2003 decision in Lawrence v. Texas, which struck down all laws that criminalized homosexual conduct, and the 2008 decision by the Fifth Circuit in Reliable Consultants Inc. v. Earle that struck down a Texas law banning the sale of sex toys.

By contrast, Sloviter found that “gambling, even in the home, simply does not involve any individual interests of the same constitutional magnitude” and therefore “is not protected by any right to privacy under the Constitution.”

In an interview, lead plaintiffs attorney Eric M. Bernstein of Warren, NJ, said “obviously we still believe that the act is, in and of itself, unconstitutional.”

Internet gambling proponents suffered a major setback when a federal appeals court refused to strike down a 2006 law in which Congress banned all Internet gambling transactions that would be illegal in the gambler's state. In Interactive Media Entertainment & Gaming Association v. Attorney General of the United States, 08-1981, a unanimous three-judge panel of the U.S. Court of Appeals for the Third Circuit rejected arguments that the law should be declared void for vagueness. Writing for the court, U.S. Circuit Judge Dolores K. Sloviter found that the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) “clearly provides a person of ordinary intelligence with adequate notice of the conduct that it prohibits.”

Lawyers for the gaming interests focused on the statute's use of the phrase “unlawful Internet gambling,” which, they argued, lacks any “ascertainable and workable definition.” But Sloviter found that a plaintiff who raises a facial challenge to a statute on vagueness grounds “must demonstrate that the law is impermissibly vague in all of its applications.” With that test in mind, Sloviter found that the UIGEA “cannot be deemed impermissibly vague in all its applications” because several states prohibit all gambling activity or specifically ban Internet gambling.

Law professor Stephen A. Saltzburg of George Washington University, arguing for Interactive Media, urged the court to consider the hypothetical situation in which a gambler in a state that prohibits all gambling makes a bet over the Internet with a gambling business in a foreign jurisdiction that permits such activity. In such a scenario, Saltzburg argued, it would be impossible, as a matter of law, for the bettor to know where the bet was placed.

Sloviter disagreed, saying there was nothing in the law “to suggest that Congress meant anything other than the physical location of a bettor or gambling business” in the definition of “unlawful Internet gambling.” “To the extent that Interactive's hypothetical raises a vagueness problem, it is not with the act, but rather with the underlying state law,” Sloviter wrote in an opinion joined by Judges Thomas L. Ambro and Kent A. Jordan.

“It bears repeating that the act itself does not make any gambling activity illegal,” Sloviter wrote. “Whether the transaction in Interactive's hypothetical 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.”

In the final pages of the decision, Sloviter also rejected the argument that the UIGEA violates a gambler's constitutional privacy rights. To the contrary, Sloviter found, the act of gambling ' even in the privacy of one's own home ' is not protected by any privacy right found in the U.S. Constitution. In making the privacy argument, Sloviter said, the plaintiffs relied primarily on two cases that dealt with the right to privacy in sexual matters ' the U.S. Supreme Court's 2003 decision in Lawrence v. Texas, which struck down all laws that criminalized homosexual conduct, and the 2008 decision by the Fifth Circuit in Reliable Consultants Inc. v. Earle that struck down a Texas law banning the sale of sex toys.

By contrast, Sloviter found that “gambling, even in the home, simply does not involve any individual interests of the same constitutional magnitude” and therefore “is not protected by any right to privacy under the Constitution.”

In an interview, lead plaintiffs attorney Eric M. Bernstein of Warren, NJ, said “obviously we still believe that the act is, in and of itself, unconstitutional.”