The Minnesota crisis is officially over

The Minnesota crisis is officially over, according to an announcement from iMEGA.

The Internet freedom pressure group reports that the order to Internet service providers to enforce a “black list” of badly researched online gambling websites has been rescinded by the Minnesota Department of Public Safety (DPS).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 [the] 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 on which the original ‘black list’ was 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 & Shohl in 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," he said. "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 in Philadelphia on July 9th.

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