FBI Can Target i-Gaming Through Cyber Initiative
The White House, FBI and Congress will step up their efforts to combat i-gaming - even through warrant-less monitoring - based on comments from the House Intelligence Committee, which held a closed hearing on April 24th devoted to the Bush administration’s so-called Cyber Initiative:
Rep. Darrell Issa (R-CA): If you go into a place and there’s a crime actively being committed, let’s say there’s a bookie joint, and there’s tens of thousands of illegal transactions going on every minute. And you know that. And you have proof of that. You don’t question your ability to go in and to harvest the fruit of all the activities in there, is that correct?
Robert Mueller (FBI Director): That’s correct.
Links
CNet: Transcript of FBI Director on internet surveillance
CNet: FBI’s Net Surveillance proposal raises privacy, legal concerns
iMEGA Testimony: Financial Services Subcommittee Hearing on UIGEA
April 2nd, 2008 - Edward Leyden, iMEGA’s president, offered testimony to a subcommittee of the US House Financial Service committee in opposition to the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The full transcript follows:
Good morning, Mr. Chairman. Thank you for the opportunity to present this testimony. My name is Edward Leyden and I am the president of the Interactive Media Entertainment & Gaming Association, which we generally refer to by the acronym, “iMEGA.”
iMEGA is a trade association representing entities and individuals invested in the continued growth of the Internet and of the interactive media. We view the Internet as an indispensable engine for economic prosperity and social justice. Furthermore, we adhere to the proposition that the inalienable rights that each of us holds under the Constitution to freedom of privacy, speech, expression, and conduct are not lessened in any way when we are using the Internet.
These “Digital Civil Rights” do, in our view, serve as the cornerstone for sustaining freedom and building wealth in a globalized economy.In pursuit of these guiding principles, iMEGA, on June 6, 2007, brought a case in the United States District Court for the District of New Jersey, iMEGA v. Gonzales, 3:07-cv-02625-MLC-TJB. This civil rights lawsuit challenges, among other things, the constitutionality of the Unlawful Internet Gambling Enforcement Act (UIGEA) and, by extension, the validity of any regulations promulgated pursuant to it.
On March 6, 2008, the presiding U.S. District Court judge issued a ruling establishing with crystal clarity iMEGA’s prudential and associational standing to be the champion of the interactive gaming industry against the UIGEA in the courts of this nation. In view of the fact that questioning iMEGA’s standing was the primary basis for the Justice Department’s challenge to our lawsuit, this recognition by the federal courts is a genuine and important victory for our Association.
However, at the same time, the District Court declined to rule on the groundbreaking questions we presented and, instead, simply affirmed that Congress had the right to pass the law in a constitutional manner - a point that iMEGA never challenged. As a result, the trial court is in essence standing aside and reserving these issues to be decided by a “higher authority,” the United States Court of Appeals for the Third Circuit and, potentially, the United States Supreme Court.
Of overwhelming relevance to the work of this subcommittee, today, is the fact that a federal court of competent and plenary jurisdiction has not only acknowledged the failings of the UIGEA but, in Footnote 12 on Page 27 of its decision, stated categorically that the “criminal penalties” provided for under the UIGEA do not apply to “financial businesses,” such as “financial transaction providers” –meaning banks, credit card companies and payment processors—which, according to the Court, are subject only to “regulatory enforcement.” As a result, the stated purpose of the UIGEA to “starve” the Internet gaming industry by criminally punishing the financial institutions that provide services to it has now been judicially invalidated.
Nevertheless, we continue to lodge the strongest possible objections to both the principles and details of the proposed UIGEA regulations. Even in proposed form, these rules exert a harshly chilling effect on innovation surrounding the Internet.
What is more, by imposing unprecedented burdens on the intricate system of financial transactions and payment system instrumentalities–which has up until now been universally recognized as being inherently content-neutral–these proposed regulations run the grave risk of sharply stifling the growth of electronic commerce.
iMEGA recognizes that immense political and ideological pressures were brought to bear upon the responsible agencies during the process of drafting these proposed regulations. We are, nonetheless, profoundly troubled by the Agencies’ failure to define just what an “unlawful gambling transaction” is and to, instead, delegate this determination to be made on an ad hoc basis by an entity or person having a “customer relationship” with an Internet gaming concern.
Given the still harsh sanctions facing any market participant falling afoul of these proposed rules, the natural course of action for a financial intermediary–particularly a smaller entity without a corporate legal department or sophisticated outside counsel to guide it–will be to deem every transaction submitted by an Internet gaming concern to be an “unlawful” one.
Thus, as a direct and proximate consequence, the proposed regulations will have accomplished by de facto means a blanket prohibition on Internet gaming for which no political consensus exists-or has ever existed. Far worse, however, is the deep chill that such action places upon technological innovation and the principles of financial transparency.
Against this backdrop of confusion and uncertainty, the suggestion by some for the creation of a governmental “black list” of companies or concerns deemed to have engaged in an undefined “unlawful gambling transaction” should trouble all who cling tightly to the principles of fundamental fairness and substantive due process.
Thank you again, Mr. Chairman, for this opportunity to testify. We stand ready to answer any questions you may have.
iMEGA Files Notice in 3rd Circuit Court of Appeals
April 1st, 2008 - iMEGA today filed notice in the Third Circuit Court of Appeals that it will challenge the dismissal of its suit - iMEGA v. Keisler (Acting USAG), et al - challenging the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). This notice is the preliminary step for iMEGA prior to filing a full brief regarding its appeal. The notice was filed by iMEGA’s chief counsel, Eric Bernstein, Esq., and was copied to Jacqueline Coleman Snead, Assistant United States Attorney in Washington, DC, of the US Department of Justice’s Civil Division.
Link
Gambling 911 - iMEGA files notice to appeal & open letter to i-gaming industry
iMEGA On UIGEA: Open Letter to i-Gaming Industry
On March 6, 2008, the United States District Court for the District of New Jersey handed down its opinion in the lawsuit brought by our Association – iMEGA v. Gonzales, et al. The ruling by the Honorable Mary L. Cooper contains a great deal of good and yet some bad aspects for iMEGA – and for the rights, the people and the medium we are defending.
First and foremost, the Court established, with crystal clarity, the standing (and associational standing) of iMEGA to challenge this law in court. This is no small thing. Judge Cooper herself spent 15 pages of her 29-page decision establishing iMEGA’s standing, in the process knocking down the US government’s primary challenge to our suit. iMEGA flat-out beat the government on that point.
Many legal commentators—both supporters and naysayers—from the beginning viewed the question of iMEGA’s standing as an insurmountable barrier to moving forward. Well, we’ve crossed over that barrier, and now the government has to contend with iMEGA as fully and unquestionably empowered by the Court to assert our rights in the courts of the United States. The fact that the Federal courts have now recognized iMEGA as the champion of Internet Gambling industry cannot be overstated.
However, at the same time, Judge Cooper essentially failed to rule on the groundbreaking questions we presented, namely, that those fundamental rights we all enjoy – of privacy, speech, expression, and conduct – should not be lessened in any way when we are using the Internet.
With her dismissal, Judge Cooper simply affirmed that Congress had the right to pass the law in a constitutional manner - a point iMEGA never challenged. As a result, the Court is in essence standing aside and reserving these issues to be decided by a “higher authority,” the United States Court of Appeals for the Third Circuit and, potentially, the United States Supreme Court.
However, Judge Cooper’s opinion not only acknowledged the failings of the Unlawful Internet Gambling Enforcement Act (UIGEA) but, in Footnote 12 on Page 27 of her decision, stated categorically that the “criminal penalties” provided for under the UIGEA do not apply to “financial businesses,” such as “financial transaction providers” (i.e. banks, credit card companies an payment processors)—which are subject only to “regulatory enforcement.”
Given that UIGEA’s authors and supporters made it perfectly clear from the start that their driving purpose was to “starve” internet gambling by criminally punishing the financial institutions that provide services to it, the Court’s decision will have a monumental impact across the board, in the courts and in various legislative branches.
The next step for iMEGA is to take this battle to the Third Circuit Court of Appeals in Philadelphia, an appellate court that has been traditionally protective of the fundamental rights of speech and expression. One need only look to that Court’s striking down (multiple times) of the Child Online Protection Act (COPA) – another well intentioned but over-reaching Federal law – for an example of how favorable that Court can be to iMEGA’s challenge.
A positive result for iMEGA in the Third Circuit, affirming our “digital civil rights”, would represent a truly landmark victory with historic consequences.
In light of political pressures, we expect the Justice Department to bring all of its vast resources to this fight. Indeed, it may be the government that first files an appeal with the Third Circuit, to overturn the standing granted to iMEGA and to put UIGEA’s criminal penalties for financial institutions back in place.
There are other fights iMEGA has been a part of, most notably its opposition to the proposed UIGEA regulations. With the possible exception of the American Banking Association, no one has more precisely and effectively portrayed how faulty the proposed UIGEA regulations are, in the hope of preventing them from being promulgated or weakened to such an extent that they become meaningless.
While we were disappointed that Judge Cooper dismissed our lawsuit, this case is far from over. We always knew that this would be the first round in a serious fight, as most important legal battles are. Many legal challenges that lost their first round make up many of the rights Americans now take for granted:
Brown v. Board of Education (”Separate but Equal” school systems) - Originally lost in U.S. District Court for the District of Kansas
Miranda v. Arizona (Illegal Interrogations) - Originally lost in the Arizona Supreme Court
Gideon v. Wainwright (Right to Counsel) - Originally lost in the Florida Supreme Court and Fourteenth Judicial Circuit of Florida
Tinker v. Des Moines (Freedom of Speech) - Originally lost in U.S. District Court and the Eighth Circuit Court of Appeals
We can’t imagine how our rights would have been preserved had those challenges quit in the first round. At issue here are fundamental questions that, ultimately, have to be decided by the higher courts, and iMEGA has been recognized by the Court as the champion to fight this battle.
We value your support as we move forward.
Anti-Internet MA Gaming Law Defeated
iMEGA Chairman Joe Brennan Jr. testified before the Joint Committee on Economic Development and Emerging Technologies in Massachusetts, to oppose the clause in Gov. Deval Patrick’s casino legislation that would have made gambling on the Internet a crime punishable by up to two years in prison and a $25,000 fine. The legislation was defeated in committee by a 10-8 vote.
Below is a transcript of Mr. Brennan’s testimony:
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Court Grants iMEGA Standing to Challenge Flawed Online Gaming Law
Federal Judge Questions Key Provisions of Law Used by Federal Government that Limits Personal Rights
(Washington, DC – March 6, 2008) – The Interactive Media Entertainment & Gaming Association (iMEGA) today applauded the decision by Judge Mary L. Cooper, of the U.S. District Court for the District of New Jersey, granting iMEGA the standing to pursue a challenge of the Unlawful Internet Gambling Enforcement Act (UIGEA). This is a significant victory for iMEGA in the case of iMEGA v. Gonzales, et al.
“Granting iMEGA standing is a major victory any way you look at it,” said Eric M. Bernstein, Esq., attorney for iMEGA. “Judge Cooper’s ruling holds that, even with the passage of UIGEA, online gambling is only illegal in states where a statute specifically says it is.”
“iMEGA is very pleased that the Court recognized our standing and the weaknesses in UIGEA” said Joe Brennan Jr., the chairman of iMEGA. “Judge Cooper found that banks, credit card companies and other payment system instruments are exempt from criminal sanctions under UIGEA, significantly undercutting UIGEA’s enforcement mechanism. Her ruling echoes the growing consensus of opinion that UIGEA is a fundamentally flawed statute.”
“We believe Judge Cooper missed the opportunity to affirm Americans’ online privacy rights and we plan to appeal to the Third Circuit Court of Appeals,” continued Bernstein. “However, her honor’s decision significantly undercuts the federal government’s argument that UIGEA is a well-drafted, effective and enforceable law.”
UIGEA was passed in the waning minutes of the 109th Congress with very little input from most Members of Congress. iMEGA filed suit to challenge UIGEA on June 5, 2007 and oral arguments were heard in the case on September 26, 2007. A decision has been pending since that date. In the interim, the Federal Reserve Board of Governors and the Department of the Treasury have issued proposed regulations to implement UIGEA and iMEGA and numerous other organizations, such as the American Bankers Association, have filed comments objecting to them.
“iMEGA supports the use of effective, existing technologies to protect children and problem gamblers,” continued Brennan. “Although UIGEA is purportedly designed to limit illegal Internet gambling, it falls woefully short of having the ability to accomplish that purpose and fails the American people on a number of fronts. If promulgated, the proposed regulations would stifle online innovation and commerce; inadequately protect children by failing to ensure adequate safeguards; and have a chilling effect on the digital civil rights of all Americans.”
The official name of the case is Interactive Media Entertainment & Gaming Association vs. Alberto Gonzales, et al.
iMEGA v. Gonzales, et al.
Net Neutrality: Congress Votes, Again
Feb. 13 - Rep. Edward Markey (D-MA) and Rep. Chip Pickering (R-MS) are renewing debate in the US Congress on Net Neutrality by proposing the “Internet Freedom Preservation Act”, which proposes the Federal government “maintain the freedom to use for lawful purposes broadband telecommunications networks, including the Internet, without unreasonable interference from or discrimination by network operators.”
Links
Download: Internet Freedom Preservation Act (PDF)
News.com: Net Neutrality Bill - “No Favoritism”
AP/Washington Post: Bill Bars Web Traffic Discrimination
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IP Addresses = Private Information?
The European Union’s Data Privacy regulators want the IP addresses of Internet users to be considered as personal information, according to a report by the Associated Press. That policy puts the EU on a collision course with Web giants like Google and Yahoo, as well as a growing number of popular Web 2.0 services, which utilize IP addresses to personalize and improve the relevance of their offerings to Web users.Peter Fleischer, Google’s global privacy counsel, told the AP that Google collects IP addresses to give customers a more accurate service because it knows what part of the world a search result comes from and what language is used — and that was not enough to identify an individual user.
But privacy advocates, led by Electronic Privacy Information Center, claim reduced search data storage and cookie duration by Google and others are a ruse to obscure the commercial value of users’ accumulated personal data.
What is certain is that the legacy technology of IP addresses is not enough to satisfy the growing needs of both commercial Internet firms and privacy advocates, without stalling innovation or devolving the quality of services for Web users. What is needed is more cooperation and innovation on the part of both camps, in order to create more advanced and nuanced solutions to replace a rapidly obsoleting protocol.
Links
Washington Post/AP: IP Addresses Are Personal Data, E.U. Regulator Says
Wikipedia: IP Address
MySpace, State AGs Agree to Cooperate
MySpace - the world’s largest online social network - and the attorneys-general of 49 states have agreed to a new regime of security measures aimed at protecting minors from online predators. MySpace will create an email registry to enable parents to chose to bar their children from registering on the site. Users under the age of 18 years will also have the default for their profiles set to “private”, allowing only user-approved individuals to view their pages, and photos submitted to the site will be screened before they are published.While the measures agreed upon still take a “supply-side” approach to protecting children - by reducing the number of under-18 users on MySpace - without new solutions for targeted the actual predators, iMEGA sees this as a good first step toward government/industry cooperation instead of antagonistic law-making and vilification through the media.
Link
Financial Times: MySpace Agrees to Security Measures
CNet: MySpace Takes a Step Toward Safety
Update: iMEGA Files Objections to UIGEA Regulations with US Treasury
iMEGA announced today that it has filed its objections with the Department of Treasury over the agency’s proposed regulations regarding the Unlawful Internet Gaming Enforcement Act (UIGEA). The new law, attached in the waning minutes of the 109th Congress to the unrelated Safe Ports Act with very little input from Members of Congress, is a misguided and potential harmful attempt to regulate Internet content.iMEGA believes UIGEA and its proposed regulations establish a dangerous precedent for denying Americans’ First Amendment rights; that it will stifle online innovation and commerce; that it will inadequately protect children by eliminating the established safeguards offered by banks and credit card companies; and that it will have a chilling effect on the privacy rights of Internet users. iMEGA has made asserting and safeguarding Americans’ civil liberties in the online world part of their core mission.
“These proposed regulations will limit Americans’ freedom to use the Internet as they see fit in the privacy of their own homes,” said Edward Leyden, President of iMEGA. “While UIGEA is intended to protect minors and problem gamblers, the law ironically makes these groups more vulnerable by targeting US banks and credit card companies, whose identity verification, fraud prevention and credit profiling systems protect online consumers every day.”
“How does this make children and problem gamblers safer?” Leyden asked. “The fact is, it does not, and is certainly not worth the trade-off in our First Amendment rights the law demands. This is a dangerous precedent that must be corrected to preserve our digital civil rights.”
Links
Read the full statement
iMEGA: Response to UIGEA Draft Regulations (PDF format)
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