Minnesota Drops "Black List" Blocking Order in Settlement with iMEGA

 An order to Internet service providers to enforce a
"black list" of Web sites has been rescinded by the Minnesota
Department of Public Safety (DPS). In a letter from John Willems, head
of the department's alcohol and gambling enforcement division (AGED),
the ISPs were told they were no longer required to block state
residents' access to a list of 200 Internet gambling sites, and that
DPS did not anticipate issuing any future orders, indicating the issue
of online gambling was better addressed though legislative efforts.

"I believe it may be more appropriate to resolve this problem by
working to create clear and effective governmental policies concerning
regulation of gambling,"Willems wrote.

Willems cited the civil suit filed by iMEGA in the US District Court
of Minnesota in his rescission letter. iMEGA's suit, Willems wrote,
contended that "the notice sent to you and other Internet service
providers was not legally valid," and that the notice "violated the
First Amendment and the Commerce Clause."

"Whether or not iMEGA ultimately would have prevailed in court is
unknown. Notwithstanding, the AGED has agreed to withdraw the notice,"
Willems wrote.

"We're very happy with the outcome," said Joe Brennan Jr., iMEGA
chairman. "It was clear the public opposed this, and the swift
negotiated settlement by DPS and AGED demonstrates both the merit of
our suit and the shaky legal ground that the original ‘black list'
were based."

As part of the settlement terms, iMEGA was given copies of letters
sent to each ISP along with confirmation of delivery. In return, iMEGA
agreed to withdraw its suit in US District Court before the June 9th
deadline for Minnesota to respond.

"We're glad this did not have to go the distance through the courts,"
Brennan said. "To their credit, the officials from attorney-general's
office, DPS and Mr. Willems have been reasonable and professional
throughout this process. Even though we were on opposite sides of this
issue, they really wanted to get things right. It's a refreshing
change from some of the encounters we've had with other state
governments."

Brennan applauded the work of iMEGA's legal team, especially that of
Minneapolis attorney John Borger of Faegre & Benson, and Jon
Fleischaker of Dinsmore & Shohlin Louisville, KY. "Mr. Fleischacker
did a great job coordinating the whole effort, particularly through
his firm's existing relationships with the ISPs and experience with
the regulatory issues. Mr. Borger jumped right in and did an excellent
job of filing quickly and producing a complaint that made it clear
that the law simply did not support Minnesota's position."

On other legal fronts, iMEGA is still waiting for a decision by the
Kentucky State Supreme Court on an appeal by Gov. Steven Beshear (D),
of a Court of Appeals ruling that stayed the state's seizure of 141
domain names tied to Internet gambling.iMEGA and a coalition of
groups, including the Interactive Gaming Council of Vancouver, BC and
the Poker Players Alliance, prevailed in a 2-to-1 decision in that
matter in January 2009.

iMEGA is also considering whether it will intervene in a seizure
action initiated by the US Attorney's office in Manhattan, freezing
more that $35 million in payments to US online poker players. The
action is reportedly based in part on the Unlawful Internet Gambling
Enforcement Act (UIGEA) of 2006, a law iMEGA has challenged in Federal
court, and which is due to be heard by the US 3rd Circuit Court of
Appeals next month in Philadelphia on July 9th.

Links

iMEGA dismissal & Minnesota rescission letter to Internet Service
Providers (pdf format)