On Appeal from the United States District Court for the District of New Jersey (D.C. No. 3-07-cv-02625) District Judge: Honorable Mary L. Cooper.
The opinion of the court was delivered by: Sloviter, Circuit Judge
Before: SLOVITER, AMBRO, and JORDAN Circuit Judges.
Congress enacted the Unlawful Internet Gambling Enforcement Act of 2006, 31 U.S.C. § 5361 et seq. (the "Act"), because "traditional law enforcement mechanisms are often inadequate for enforcing gambling prohibitions or regulations on the Internet, especially where such gambling crosses State or national borders." 31 U.S.C. § 5361(a)(4). Congress also found that "Internet gambling is primarily funded through personal use of payment system instruments, credit cards, and wire transfers." 31 U.S.C. § 5361(a)(1).
Appellant Interactive Media Entertainment & Gaming Association, Inc. ("Interactive"), is a New Jersey not-for-profit corporation that collects and disseminates information related to electronic and Internet-based gaming and whose members are businesses that provide gaming services, including Internet gambling, to individuals located throughout the United States and the world. It raises a number of facial constitutional challenges to the Act. The District Court dismissed Interactive's claims, some on standing grounds and others on the merits. It appeals.
The Act provides that "[n]o person engaged in the business of betting or wagering*fn1 may knowingly accept, in the connection with the participation of another person in unlawful Internet gambling," various forms of financial instruments (such as credit cards, electronic fund transfers and checks). 31 U.S.C. § 5363. The Act defines "unlawful Internet gambling" as "to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made." 31 U.S.C. § 5362(10)(A).
Any person who violates § 5363 commits a crime punishable by fine and/or up to five years imprisonment. 31 U.S.C. § 5366(a). Moreover, upon conviction of that criminal offense, the defendant may be permanently enjoined from engaging in the making of bets or wagers. 31 U.S.C. § 5366(b). Finally, the Act also provides that federal and state authorities may bring civil proceedings to enjoin any transaction prohibited under the Act, 31 U.S.C. § 5365, and mandates that the Secretary of the Treasury and the Board of Governors of the Federal Reserve System enact regulations requiring certain financial institutions "to identify and block or otherwise prevent or prohibit" the transactions barred by § 5363." 31 U.S.C. § 5364(b)(1).*fn2
Interactive filed a complaint alleging that the Act was facially unconstitutional and contrary to the United States' treaty obligations. It sought to enjoin the enforcement of the Act as well as the promulgation of regulations thereunder. After Interactive moved for a preliminary injunction, the District Court granted the Government's cross-motion to dismiss the complaint.
Interactive claimed the Act violated the First Amendment and the Government argued that Interactive lacked standing. The District Court rejected the Government's standing defense but, when it reached the merits, it rejected Interactive's expressive association claim because the Act "does not have any adverse impact, much less a significant one, on the ability of the plaintiff and its members to express their views on Internet gambling." App. at 21. Indeed, the District Court noted that the conduct prohibited by the Act -- the taking of another's money in connection with illegal gambling -- does not involve any "communicative element" and "essentially facilitates another's criminal act." App. at 23.
Next, the District Court rejected Interactive's commercial speech claim because the Act "does not actually implicate First Amendment interests" given that the "acceptance of a financial transfer is not speech," and even if it were, the Act only applies where the transfer is related to illegal gambling. App. at 25.
The District Court also rejected Interactive's overbreadth and vagueness arguments. As to the First Amendment overbreadth argument, the Court concluded that the Act "does not implicate any form of protected expression, and thus there is no overbreadth problem." App. at 26. As to the due process vagueness claim, the Court rejected that argument because the Act's prohibitions "are not 'in terms so vague that persons of ordinary intelligence must necessarily guess at its meaning and ...