ongress passed the Unlawful Internet Gambling Enforcement Act in 2006 to ban online gambling that would be illegal in the state where the individual or gambling business conducts the transaction. The law does not target the bet itself but criminalises bank or credit card transactions linked to the bet.
The group, comprised of mostly offshore betting operators, had attacked the law as unconstitutionally vague. Their lawyers questioned how the location of an online bet would be determined if the gambler is in Delaware, for instance, and the operation is in Costa Rica.
At least one of the three judges who heard arguments last month seemed to question that logic. "No matter how metaphysical you want to get, I'm not in Costa Rica, I'm in Delaware," 3rd Circuit Judge Kent Jordan said.
The court also rejected arguments that the law invades a gambler's right to privacy in the home. The Justice Department, which successfully defended the law, had no immediate comment, a spokesman said.
While the association is considering an appeal, Chairman Joe Brennan Jr. said he saw a potential victory in the ruling because most states have not expressly addressed the legality of online betting.
"The Justice Department has been insisting there is a blanket ban on internet gambling in the US, but the panel said state law is the determinant," Brennan said. "If you go by that reasoning, if it's not illegal in that state, then it would not be a violation of federal law to process a transaction from a player there."