UIGEA and latest efforts

In late 2006, the US introduced the Unlawful Internet Gaming Enforcement Act (”UIGEA” - HR4411 ), a watered-down Act based on its predecessor HR4777 (http://www.gambling-law-us.com/Federal-Laws/internet-gambling-ban.htm) designed originally to prohibit online gambling in the USA. The passage of the UIGEA has been well documented, but just how much of an effect has the Act had on online gambling in the USA since its introduction?

As soon as the UIGEA was passed into law, it caused ructions in the online gambling industry. While stopping short of prohibiting online gambling outright, it attempted to pass a responsibility onto banks and online payment processors to ensure that US account holders were prevented from depositing to and receiving funds from online gambling operators. Online casinos, poker rooms, sportsbooks and bingo sites were faced with a decision to make: did they continue to deal with US punters, or withdraw from the US and play the game?

The Act was shrouded in controversy, even before it was pushed through. Its supporters were championing “family values”, whilst its detractors were keen to point out that the Act excluded State run lotteries and horse racing and was clearly money related. Either way, the law was passed and a timescale was set for the banks to comply by mid 2007. At around the same time, the DOJ and the FBI started a targeted campaign of arrests in the online gambling industry, albeit that these were all sportsbook related, a form of gambling that is covered under a 1961 law entitled the Wire Act. The cleverly orchestrated campaign led to a flurry of reaction in the industry, with many operators, software providers and payment processors pulling out of the USA.So as we sit here in late-2008, what effect has the UIGEA had?

A scout around the popular gambling forums would quickly suggest two things: firstly, there are still a lot of US poker players and punters out there, and secondly these have had a lot of difficulty finding places to play. The latter is not only due to a reduction in gambling sites taking US players, but also largely down to a lack of efficient deposit and cashout processing options. On the face of it, this will clearly please the supporters of anti-gambling legislation, especially considering that the deadline for banks to meet the terms of the UIGEA has long passed and no visible headway has been made. It would appear from recent discussions in Congress that the lack of clarity in the Act coupled with the sheer size of the resources required for banks to monitor every customer transaction has prevented implementation at this point.