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iMEGA One Year Later...By Hartley Henderson

Almost one year ago Ed Leyden and Joe Brennan made noise at the GIGSE conference when they announced the formation of iMEGA, a trade group formed to protect freedom of the internet. While their larger goal was to ensure that basic freedoms set out in the constitution were not infringed on just because they took place on the internet, their more immediate concern was to somehow repeal the UIGEA, which Joe Brennan called "an unjust law that was cynically crafted to provide red meat for social conservatives for the 2006 mid term elections". The group saw the UIGEA as the start of a slippery slope that would allow Congress to pass other laws which would curtail internet growth under the guise of national security. The group may have been correct.

Just last month, FBI agent Robert Mueller and Representative Darrell Issa drew up a proposal called the Cyber Initiative which would force ISPs to open all the browsing activities done through their networks without the need of a warrant. The FBI is hoping that a law could be passed which would require all ISPs to amend their terms of service forcing users to allow all their browsing activities to be monitored by the FBI under the guise of protection for the individual and companies against malicious attacks. The eventual hope of those supporting the initiative is that it would allow the FBI to "shut down a crime in process". What entails a crime would be left up to the FBI to determine. No doubt that would include, but would not be limited to, p2p file transfers, bit torrent downloads and internet gambling. Clearly this is part of the slippery slope to curtailing basic freedoms just because the activity occurs on the internet.

iMEGA`s first initiative back in June was to sue the Attorney General's office in an attempt to block the writing of the UIGEA regulations. Officially the motion failed, as the Treasury did release the regulations in October of 2007. However, what was released by the Treasury was clearly done in haste, which in part could have been due to the lawsuit. Ed Leyden spoke for iMEGA at a house subcommittee meeting regarding the UIGEA regulations in April of this year where he stated: "the inalienable rights that each of us holds under the Constitution to freedom of privacy, speech, expression, and conduct should not lessened in any way when we are using the Internet." He, along with many other speakers from banks and various agencies showed the failings of the regulations, which are so severe they could actually lead to the crippling of the U.S. banking industry if the banks are forced to try and implement them. Leyden made one of the most poignant comments at the hearing when he stated: "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." It is evident to anyone who witnessed that hearing that the regulations will not and can not be implemented as written, and therefore iMEGA may have indeed blocked meaningful regulations from being drafted. As Ed Leyden stated to me today: "the overreaching rules that the regulations set out will be difficult, if not impossible, to implement. Thus our initial goal of injunctive relief may have happened as a matter of course."

iMEGA also has a strong presence on Capital Hill where they continue to lobby for the industry. The company hired New York lobby group Ogilvy Public Relations Worldwide, which has been building brand awareness of iMEGA and has also been encouraging politicians to support UIGEA repeal and to consider counter bills such as those proposed by Barney Frank, Shelley Berkley and Robert Wexler. The lobbying efforts could prove to be of extreme importance if a Democrat is voted in as President this fall. Most of those opposed to the UIGEA are Democrats, but they have had difficulty being heard while George Bush has been in power. If a Democrat with thoughts similar to iMEGA regarding the UIGEA takes power, the voices of Frank, Berkley, Wexler and others may be considered more seriously. Don't forget, the Attorney General is appointed by the President of the United States, and both the Senate and House of Representatives are now in control of the Democrats. If the American Banking Association can illustrate to the new president how any UIGEA regulations can potentially harm the industry, and if the right lobby groups such as iMEGA or Poker Player's Alliance can illustrate how the UIGEA has the potential to curtail freedom of the internet and also demonstrate how online gambling could reap huge financial benefits for the country, there is no reason to think the new President's views on gambling can't be swayed if he/she isn't already in support of it. While a few politicians have some issues with online gambling, just as many are appalled by the law that was shoved through without a hearing.

Asked whether he has been happy with the progress of iMEGA this last year, Mr. Leyden stated that he has been very pleased with the organization's progress. Certainly he was disappointed that the lawsuit against the AGs office was dismissed by Judge Cooper initially, but he was pleased that the group was given standing to challenge the law. "That was a huge development," Mr. Leyden stated. "It clearly affirms our right to be represented on this issue." Mr. Layden said that the organization has grown steadily and that people are coming forward all the time expressing interest in their movement. As for the future, Mr. Leyden said that they will continue fighting for the defeat of the UIGEA, but more importantly iMEGA will fight against any laws that could result in censorship of the internet. iMEGA issued an appeal to the dismissal of its lawsuit in the 3rd district court of Philadelphia. Also, in an open letter to the gaming industry, iMEGA tried to illustrate that appeals are often upheld citing numerous examples. In the letter the organization stated the following:

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 favourable 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.

iMEGA also tries to indicate why freedom of the internet is so important, providing numerous news articles on its website ( where basic freedoms of Americans are being challenged simply because they occur on the internet. Without question iMEGA has been a strong voice in America for the gambling industry.

Hartley Henderson

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