An Analysis of the UIGEA (Unlawful Internet Gambling Enforcement Act): Legal and Practical Repercussions

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An Analysis of the UIGEA: Legal and Practical Repercussions By: CasinoAdvisor.com, Saturday January 5th 2008 57 Comments Email Print Listing of U.S. Casinos Not Affected by the UIGEA and Accepting U.S. Players: Go Casino Online Vegas Casino Rushmore Casino Millionaire Casino More U.S. Player Accepting Online Casinos » UIGEA Article Quicklinks: Introduction History of theUIGEA Passage of the UIEGA UIGEA Analysis Applicable State and Federal Laws Website Blocking Provisions Foreign Jurisdictions Conclusions Introduction Surprise spread quickly over the online gaming industry when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed by Congress in 2006. Several publicly listed members of the gaming industry took it so seriously that they ceased taking bets from American players before even having read the Statute. This article will evaluate the significance and impact of the Act on the gaming industry by discussing its historical background and legal consequences. [Top] History of the UIGEA Congress had been attempting to pass anti-online gaming legislation since 1998. All of these efforts, however, had failed due the immense hurdles entrenched in the law making process. Each year the bill would be held up in committees by lobbyists from various interest groups wanting their piece of the pie. As a result, every legislative session Congress would run out of time before the Bill could be passed. In 2006, however, while a Republican controlled Congress was fighting to separate itself from the corruption and scandal stemming from connections with online gaming lobbyist Jack Abramhoff, the party created an "American Values Agenda" which included prohibitions on online gaming. Representatives Bob Goodlatte (R-VA) and Jim Leach (R-IA) lead the movement. Goodlatte said that online gambling was taking billions out of the American economy and Latte linked online gaming with threats such as identity theft, fraud, national security, and money laundering. Polls showed, however, that the majority of citizens believed that online gaming was a personal choice and even with all of the pandering to the conservative right, the Republicans could not avoid the pending defeat in November 2006 with both Houses going to the Democrats. The Republicans did not quietly though, slipping the UIGEA through as an attachment to a Homeland Security bill just before the power shift. [Top] Passage of the UIGEA In 2006, the political environment favored passing anti-gambling legislation. The scandal-ridden Jack Abramhoff had opposed anti-gambling efforts numerous times in the past and both Houses of Congress wanted to distance themselves from his past affairs. Thus, in 2006 Congress was able to pass Internet gambling legislation but nowhere near as broad or challenging as expected. In the summer of 2006, two separate bills were introduced by the House of Representatives. The Leach Bill aimed at stopping certain electronic financial transactions (ETFs) surrounding online gambling while encouraging the cooperation of foreign governments. The Goodlatte Bill was similar to the Leach Bill but also intended to expand the scope of the Wire Act to encompass online casinos and poker rooms through a change in the definition of "the business of betting and wagering." Due to controversies over the Goodlatte Bill, the House eventually comprised on a joint bill, which included aspects of both. The House passed the Leach/Goodlatte Bill in July 2006 and the legislation was sent to the senate for consideration. While most analysts predicted that the Senate would run out of time before the Bill was passed, Senate Majority Leader Bill Frist (R-TN) was able to tack it onto the SAFE Port Act in the final hour. In order to achieve this without resistance or alarm, however, the controversial provision of expanding the Wire Act had to be removed. Because the Bill was now attached to nearly unstoppable Homeland Security legislation and the Wire Act provisions had been removed, the Bill's passage became inevitable. Thus, even though the UIGEA is a reality, with the Wire Act provisions removed, there has really been no substantive change in the legal consequences than what previously existed under state and federal law prior to its passage. What it is did create is language leads to perplexities and conflicts. [Top] UIGEA Analysis Language §5363 - Prohibition on Acceptance of Any Financial Instrument for Unlawful Internet Gambling No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person, in unlawful Internet gambling - [credit, EFTs, checks, drafts, or the proceeds of any other form of financial transaction as set forth in federal regulation]. Prior to the UIGEA, entities or persons that assisted or facilitated online gambling transaction could only be charged with aiding and abetting (substantially assisting an individual in the commission of a criminal offense makes you equally liable as the individual committing the offense) or conspiracy (knowingly and voluntarily participating in an agreement to violate the law). With the passage of the UIGEA law enforcement officers no longer need to rely on distorting the existing laws to punish those participating in online gambling transactions (aiding and abetting requires no knowledge and conspiracy requires no crime) Bet or Wager the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome. Also included in this definition is a lottery prize awarded by chance, known as a "scheme" under United States Code 28 USC §3702 Scheme any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from, an account with the business of betting or wagering. This is where the problem in the original language of the statute arises. The "business of betting or wagering is not defined anywhere in the UIGEA. This is how it reads, §532(2) Business of Betting or Wagering The term "business of betting or wagering" does not include the activities of a financial transaction provider, or any interactive computer service or telecommunications service. While the Act tells what the "business of betting or wagering" is not, it avoids defining what it is. It is likely that the term was defined in the provision that expanded the Wire Act, which has been subsequently excluded. The result is that by defining what the "business of betting or wagering is not" the Act as created a considerable amount of vagueness surrounding whether it applies to industry it was supposed to be directed at - "financial service providers." Elements of a Violation of the UIGEA To establish that an individual or entity is in violation of the UIGEA, it must be proven that, (1) A "person" was engaged in the business of betting or wagering; (2) That person knowingly accepted a financial instrument or proceeds thereof; AND (3) That instrument was accepted (by the person) in connection with the participation of another person in "unlawful Internet gambling." Thus, when a person (individual or company) that is actively involved in the "business of betting or wagering" (as defined by §5362(1) and §532(2)) accepts a financial instrument that they know stems from that business AND it is from another person who is engaged in unlawful Internet gambling, then the UIGEA has been violated. The problem thus becomes, what constitutes "unlawful Internet gambling?" Unlawful Internet Gambling 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. Thus, the UIGEA is simply a focused enforcement of the current Internet gambling laws in existence within specific jurisdictions. [Top] Applicable State and Federal Laws Federal Laws The applicable federal law criminalizing online gaming is the Wire Wager Act (Wire Act). Although the Wire Act has been used successfully against sports betting businesses, the United States Fifth Circuit Court of Appeal has read the Wire narrowly so that it does not apply to any type of gambling but sports betting. While some other federal laws such as the Organized Crime Control Act, the Travel Act, and the Wagering Paraphernalia Act have been recognized by state courts as applying to Internet gambling, federal courts have only recognized the Wire Act thus far. In addition, federal statutes on the matter have only addressed sports betting, numbers, bolita, wagering pools, and like games. State Laws A large problem arises when evaluating the UIGEA under state law because each of the 50 states may have different legislation on Internet gambling. If we were to provide an analysis of the UIGEA under state law, we would need to evaluate each State's online gambling legislation, judicial interpretation, and keep a constant watch on amendments, repeals, and new legislation on the issue. Because the act of wagering online is not expressly barred at the federal level, the UIGEA, when read narrowly, might only apply to state online gambling laws. Aside from the insurmountable problem of analyzing the UIGEA under state specific law, a major Constitutional issue has been created. When state laws seek to regulate interstate, national, or international commerce, that law may be unconstitutional under the "dormant" Commerce Clause of the United States Constitution. Underlying this Clause is the need for consistent and efficient transactions over state borders. Almost all state Internet regulations have been struck down under the "dormant" Commerce Clause. Although the courts have yet to deal with this issue surrounding online gambling, an extension of the Clause is likely. Therefore, if the courts should find state laws on Internet gambling unconstitutional, the UIGEA would only be applicable under federal law where online gambling is not specifically illegal. [Top] Website Blocking Provisions Under the provisions surrounding Internet Computer Services (ICS's), the Attorney General of the United States has nearly unlimited power to remove websites he or she believes are violating the UIGEA. Although the ICS has the right of advance notice and opportunity to appear, it is ambiguous on where exactly they can "appear" and there is no mention in the Act of the procedural safeguards afforded to the website operator, who's company is about to be extinguished without the Due Process guaranteed by law. If this were not bad enough, under the UIGEA, the US government is allowed to violate Free Speech rights through mandatory censorship. The US government can make ICS's shutdown a website without notice to the owner, thus denying their right to object. The potential for abuse of authority under the UIGEA is overwhelming. The Attorney General can shut down a website for reason he or she desires, even on a whim. Given that the Internet has been called "the most participatory form of mass speech yet developed" by the Supreme Court of United States, it appears that Congress has decided to ignore Free Speech rights by denying notice and right to be heard, even as the Court has afforded it so much protection. [Top] Foreign Jurisdictions Because online gambling operates outside the jurisdiction of the United States, and companies frequently obtain offshore licenses, it will be difficult for the US government to enforce the UIGEA against international entities. For this reason, the UIGEA devotes a section to this matter, Internet Gambling in or Through Foreign Jurisdictions Rather than creating new regulations, this section focuses on attempts pigeonholing online gambling into already existing international crimes such as money laundering, corruption, etc. Advance policies which promote cooperation with foreign governments Information exchanges aimed at enforcing the UIGEA Annual report by the Secretary of the Treasury of a detailed summary of the communications between the US and other countries about online gambling Although these policies are an excellent expression of the aspiration of the US government, the reality of their success is unlikely in all but the most serious of cases. In most circumstances, cooperation should only be expected when an actual violation of law occurs. [Top] Conclusion Although the UIGEA effectively has failed at banning Internet gambling, its success and impact will be measured by certain future considerations. The ease of financial service providers in identifying and blocking restricted financial transactions under the UIGEA regulations, the reaction of service providers such as banks and NetTeller to regulations stemming from the Federal Reserve, as well as the their ability to voluntarily cooperate with such regulations will all play a part. From a substantive legal perspective, the UIGEA is somewhat meaningless. It simply codifies prohibitions into a crime specific regulation that could have been pursued by creative uses of already existing laws. In addition, all of the new material is unenforceable for jurisdictional, constitutional, or simply inconceivable as a practical matter. Ultimately, its real world effect is to increase the risk of operators in the industry, open up doors for small-scale entrepreneurs as the larger ones get out of the spotlight, and make the aspirations and intentions of the United States government known. The one thing it has not done is ban online gambling. [Top] Related Articles Developments in UIGEA & Online Casino Law US Online Gambling on Knife Edge Related News Barney Frank Introduces Anti-UIGEA Bill New Bill for Regulating Online Gambling US States Debate Online Casino Gambling UIGEA Rules Finally Deferred Uncertainty over UIGEA Implementation US Legislators Move to Defer UIGEA Court Of Appeals Upholds UIGEA Anti-UIGEA Bill To Be Introduced In U.S. Senate UIGEA, iMEGA And Frank's Bill It's Bad News For iMEGA In The UIGEA Appeals Case Article Tools Email Print Digg Del.icio.us StumbleUpon Comments Add Comment Comment by: luciaworld On: May 27, 2011 The UIGEA is being used by government agencies right now as we speak to abolish online gambling to make way for Las Vegas based gaming groups to enter into the market without the need to compete with existing established operators already with a presence and brand recognition online. The moves set into motion including Black Friday that resulted in several indictments and domain name seizures followed by Blue Monday are blatantly obvious as per whose responsible for invoking these actions and furthermore who actually controls the Government in the United States. It's definitely not the people of the country that really have any influence whatsoever as to what's best for them and what they should get but rather the all mighty dollar and capitalistic greed facilitated though large corporations that controls the country and who does what. It's definitely not the first time we've seen private enterprise influence government action and definitely not the last. The UIGEA was the first step that has ultimately led to where we are today with respect to online gambling and recent events are a pre-cursor of what's to come. Granted there will be a huge benefit to Las Vegas gaming groups being involved in the industry, however somewhat at a loss of competition. Las Vegas gaming groups in my opinion are kind of cowardly and taking the easy way out where if they were smart they would acquire well established brands and companies with potential and leverage on their expereince. The online gaming industry is a whole other kettle of fish and they have no idea. Look at how miserably the British Columbia (Canada) government ran their online casino. The same thing is likely to come of operations being run by Las Vegas Land based gaming groups which could easily have been avoided. Comment by: Kevin Jones On: February 10, 2011 It's my belief that that because the USA is getting more and more desperate with respect to their overspending and deficit continuing to grow and the slowing down of overall growth of country that we'll definitely see a more proactive approach to gaming laws in the very near future. From what I read New Jersey is being proactive already and is implementing their own online gambling legislation. I beleive this will mean that other states will soon follow suit. The UIGEA becomes irrelevant when the government wants to do it it's only when private operators working in an unregulated market that are capitalizing off American people that we see them wanting to take action. Comment by: mrsparks On: February 08, 2011 I definitely wish that things within this industry were regulated with some form of dignity whereby operators actually took pride in the fact that they're able to milk this industry for the time being. You figure because of this that they'd all be honest and that regardless of things such as the UIGEA that they'd know their place. I can't wait until Vegas and larger gaming groups are able to get into this industry and take it over. I would perhaps not feel this way if I didn't feel like all online casinos were really out to take us for a ride. Comment by: Ramone On: January 04, 2011 Regulation is definitely something that has to come to the table this year I would say. 2011 is going to be a year of change for the US economy and I beleive that wholeheartedly. The fact that offshore gaming operators are able to capitalize on this lucrative market while on land operators found in Vegas and all over the US are not is kind of ridiculous. The UIGEA was stupid and there could have definitely been a far more proactive solution to regulating the industry. This approach taken to crush the online gaming industry as it is really isn't working as gaming operators are still able to survive and continue to excel in the industry. Comment by: jukujaka On: December 15, 2010 The UIGEA stuff is such bullshit and just an indicator of how the clash between government and the private sector exist. The law is unfounded and was past in what I would consider an illegal fashion. But this is the United States of America at the same time where everything goes and there are no repercussions for those who make the laws, unless of course they get caught banging another woman or in some cases a man, lol... Comment by: Spencer H On: October 11, 2010 I've been watching this thing called perspectives weekly with this guy called J. Todd recently and they've been discussing the UIGEA the history and the future of what's to come. I'm not surprised though that a lot of this stuff has been facilitated by large Las Vegas conglomerates who are trying to essentially dismantle the existing online casino gaming industry in order to push though their own agenda which really is driven by their desire to fully and completely dominate the online gambling industry. It's not really all that surprising that American government is behind big well established US business in this case but it's a bloody shame as it's clear that this is just one other thing that draws this great country closer to a fascist country. It's only been a matter of time in reality! Comment by: Sidney Blk On: September 17, 2010 Yeah it's a shame that this UIGEA bill was even ever passed. I'm so surprised that the American people aren't as frustrated as I am with this bill. I mean I'm sure there are a lot of people who are but the politicians aren't really doing much to rectify the situation which really sucks. Comment by: oliverenchin On: August 31, 2010 I feel as though we'll see a more positive attitude from the United States government now especially in light of the fact that the Canadian government and provinces within Canada are really moving forward with online gambling. It's my prediction that we'll see the removal of the UIGEA and a more positive outlook for online gambling in the future of the United States. Comment by: Kinton Karling On: August 11, 2010 The recent legislation that was passed is definitely a great sign that we're moving closer towards full blown regulation of the online gambling industry which is very exciting for all of us players from the United States. I know that for me personally I'm thrilled that this is going to likely come to pass in the next year or so and that we'll finally be able to do away with all the BS that has oriented from the creation of the UIGEA. Comment by: Blake On: July 30, 2010 Quite an important milestone has now been reached in respect to Senator Barney Franks bill having been passed though the house of committee. It'll be interesting to see where things go in terms of US online gambling law over the next few months to come. I would imagine that we'll see some progress being made in the way of regulation however it's yet to be seen. The UIGEA at that point will be abolished IMO. Comment by: Ponto Rio On: July 25, 2010 The fact that we're starting to see government bodies in North America like we've seen now with the British Colombian government in regards to their latest online gambling endeavor there is definitely a shift towards running licensed government operations in Canada so it'll just be a matter of time IMO before we see an adaption of something similar in the United States. The UIGEA will eventually be redundant as there may be a number of bills that are passed within the next few years in light of Senator Barney Franks efforts to actually regulate the industry and allow the private sector in the US to run their own online casinos, etc... Comment by: simpleton On: June 29, 2010 I too beleive that the UIGEA is a load of crap and never should have passed. The fact that the US government is able to pass these laws in a stealth like manner by appending them to unrelated issues is ridiculous. I for one don't beleive in this crap and really wish that things were run differently here in the United States. Comment by: Simon Tilson On: May 12, 2010 I beleive that we'll see a shift with all this come time when pressure is being made and it's that time right now. The US deficit is ridiculous right now and the government needs money. As a result I beleive that the UIGEA is irrelevant as they'll really need to implement some sort of formal regulation of the online gambling industry so that they can tax the heck out of it. Comment by: casinofandit On: May 03, 2010 The government in the US unfortunately lacks in the progressive attitude required for them to make something out of internet gambling. The fact of the matter really isn't that online gambling is a problem in terms of it affecting the overall population of the United States but rather that the government isn't able to tax the hell out of it like they can do with everything else and thus a sort of jealousy and envy has set in. I beleive that for the government to be successful in this that they need to stop worrying about bills like the UIGEA and enforcing such bills but rather to implement regulation and policy that would allow land based gaming groups to legitimately get involved. There's no doubt that many of us players from the United States would immediately shift to a Wynn online casino over a no name online casino operation that really bears no significant recognition. Comment by: badchristian On: April 28, 2010 The UIGEA really needs to be overturned IMO for this industry to be successful where the government in the US is actually able to tax it. Working with the people that have endless experience in the industry is the way to go. Otherwise Vegas, Atlantic City and the Natives may get involved but really end up loosing their shirts if they don't execute on things properly. It would make most sense if land based gaming groups were to just buy up the entire online gambling sector and leverage all that... I doubt that it would happen but would really be great if it did. Comment by: kristoph On: April 20, 2010 Damn seems like the politicians here in our country really want to make things difficult for us with things like the UIGEA and their attempts to implement prohibitory parameters surrounding the online gambling industry. Firstly it's really not going to work and secondly it's just going to push the industry further underground and open up the doors to more unscrupulous and unsavory characters to get involved. I don't think that it's going to really work to be honest and the UIGEA is all B.S. especially how it was passed which doesn't make most of us look that favorably onto our representatives in government. Maybe bigger changes are needed :) Comment by: blizzard777 On: April 13, 2010 I for one as an American am very much disappointed at how my liberties are being treated when it comes to matters of being able to gamble online. I don't beleive that the government should be going after or targeting companies that are based over-seas seems like a real infringement of free-trade and agreements that were made by the US many years back. I think that this law or whatever comes of it should be dissolved. Comment by: Kayle S. On: April 03, 2010 Yeah the UIGEA and all this is really unfortunate and I have to agree that I beleive that it will all be overturned soon and hopefully that time comes sooner then later. Comment by: Ben Kaylington On: April 02, 2010 I wish that things weren't so difficult for you American folks. I beleive that some of the new things being discussed right now could result in the UIGEA being removed completely and there being some sort of formalized regulation of the industry which would in all honesty be superb for everyone! Comment by: Pilav On: March 24, 2010 The UIGEA should really be tossed out and they should leave us to play in peace. I mean that would be the most ideal thing that could happen here with the Unlawful Gaming Act however it's not likely that this will happen. I would like to see it being repelled and all this great stuff happening but the rich and elite in the US won't let this happen I don't beleive and thus the UIGEA come the summer will probably be in full swing in terms of there being laws that will accompany it. Comment by: chris1004 On: March 07, 2010 Me personally I think that I'd really like to see the whole industry regulated. I mean I do kinda (lol...) beleive in paying my taxes and thus would like to leverage both my losses as wins when doing my annual taxes. That's right one of the benefits of being able to play online would be that you can claim your losses. In land based casinos you can't do that as there's no way for them to really track your losses however since the online systems for gaming are all tracked and the information is all stored it's definitely possible to do it. Thus the UIGEA is a waste of time if you ask me and they should have jumped straight to full on regulation of the gaming industry. Just my opinion of course. Comment by: raytheon On: March 03, 2010 I guess with the June deadline approaching all big credit card issuers are starting to freak out a bit and as a result have implemented these darn blocks on credit card transactions over and above what they've already been doing. The UIGEA is a bunch of BS as is the US governments involvement in this. It's a real shame and I have to say that I'm disappointed in my country yet again. Comment by: Wrinkle On: February 25, 2010 I don't really think that anyone is looking forward to the inevitable but it looks like we're really on the bring of having some real issues with credit card deposits at online casinos and gambling sites online in lieu of all this. I really don't see the UIGEA being repelled at this point but rather that implementation of proper regulation that will need to be adhered to by financial institutions in the United States is likely what will happen. Anyways I don't want to get my hopes up or upset one way or the other and will wait to see what happens with all this. Comment by: player111 On: February 23, 2010 I'm not too worried about it to be honest. It's just a big scare tactic really. There really isn't anything they can do to truly shut down the online casino industry sort of physically going into each of the countries where the gaming servers that provider the ability for people to play online and shut those down. I think we all know that this is something that would never happen! Comment by: burtman On: February 18, 2010 The UIGEA laws that are supposed to be coming into effect this June are already being felt by the online gaming community. They've managed to find ways to deal with preventing first time MasterCard depositors from being able to deposit at online casinos. It's already been seen however to have been a temporary fix for MasterCard and will likely be that way for all other credit card companies. I don't think that anything they do in terms of implementing UIGEA policy to regulate it will actually work. The online gambling industry will always find away around this stuff. They just have to deal with the fact that online gambling will be around for ever. Comment by: Nathan Black On: February 07, 2010 It's really getting tiring the whole thing with online gambling in the US and especially with that of the UIGEA. I think that we'd be in a much better position in the US if things were just left along and those who opperate these offshore online gambling companies were able to do so at their own liberty. For a country so bent on freedom this seems like definitely something they should allow. Comment by: Channy On: February 02, 2010 I myself am a big fan of playing at online casinos and really know that if we had Vegas backing the brand that were online that we'd not only be safer but it would open up the world to a whole new scenario for merging between online casinos and land based casinos that we've never seen before. The UIGEA is stupid and should be repelled ASAP while they deal with the regulation side of things! Comment by: Titan123 On: January 26, 2010 I just actually submitted a post in the forum and message board about this but figured might be good to post here as well. Playtech has just signed a deal with a US company which would indicate that there are things happening here and that regulation will hopefully be set into motion soon. The company that Playtech has made this deal with is a company that specializes in technologies that are geared towards regulating the gaming industry. So whether it be online casinos, poker rooms, etc... this is a very good sign. As for UIGEA I beleive that when we see the first bills pass for the regulation of the online gaming industry that the UIGEA will simply be dissolved and declared redundant Comment by: Tealmantis On: January 14, 2010 I've heard that they are on the ball with the UIGEA and that there should be some sort of resolve with it this year in 2010. I think that for all online casino and particularly online poker players out there that this new foundry solution to a big problem in the United States with regards to offshore unregulated gambling. This will really be a milestone in the history of the online gambling industry if we do see some form of regulation come about this year. Comment by: Elise Richi On: January 04, 2010 A real shame where things are and the way that you all feel towards this as I am a big supporter of the banning of online casinos and gambling on the internet all together. I have become a victim myself of excessive gambling. I know that it's not my fault nor is it the casinos fault it's just one of those things but I'm in favor of the UIGEA and the government taking control in preventing people like me from being carried away. I'm certain that better and more efficient control measures would come into place if the government was to license and regulate online gambling but long run rise I think that there would still be people that just get more and more into debt over the bloody thing! Comment by: Joe Hodges On: December 20, 2009 From my perspective as a US player I think it's outrageous that the government would try to ban and outlaw an activity that I engage in that takes place over seas. It's a blatant violation of our constitutional right and these bloody politicians really need to be stopped. The UIGEA should 100% be repelled and if it doesn't I could only imagine that the long terms effects would be. This is only the beginning of the further removal of our rights as American citizens. Comment by: Thorton On: November 14, 2009 Agreed. The way politics are these days and for an issue like this I don't think there's as much motivation to see this thing though to a point where the Government is making money right now. Not because they don't want the money they're desperate for the money but because I think they're focusing their efforts on issues that are far more pressing and require more immediate attention. The UIGEA is stupid and wasn't passed into law in a just way from what I've read and know about it but this is US politics for you. Comment by: Billy Minor On: October 30, 2009 Certainly would be great to see a change soon but don't expect things to happen too fast I really don't think that they do because when it comes to this sort of stuff. I think that we will definitely see regulation of the online gambling industry I just don't think that it'll be for at least a few years to come. Comment by: Stephen P. On: October 17, 2009 Progress is being made and the fact that we don't have an implementation of the UIGEA right now that makes it fully illegal for banks to process credit card and banking transactions that support the gaming industry is great. I hope that there is some sort of long term resolve though as it would be great to see online casinos regulated and licensed properly! Comment by: Stella W. On: October 08, 2009 For one I would be appreciative in the freedom of playing without illusive methods that need to be applied right now for this industry to survive. I would prefer playing at legitimate online casino brands that are backed by land based casinos where there's some cross over. As for the UIGEA I think that it's pretty dumb and as for how this bill was passed shows how corrupt our governmental system with regards to issues like this really is. I hear that the treasury department is now in the process of implementing a policy for the governance and implementation of the UIGEA should be interesting to see what comes of it. Comment by: Dark Matter On: September 23, 2009 As a big supporter of freedom I think that anyone in the United States who wants to gamble should be able to at their own leisure. The fact that the UIGEA directly impacts the ability for players to do and play what they want is obviously a breach of rights and against the constitution. I think that things really need to change and framework needs to be put into place within America that allow players to play at their own will. I don't think that the wild west of online casinos is a good idea and that better more reputable regulatory bodies need to be put into place but still the UIGEA is just wrong and should be reversed ASAP. Comment by: Randy D On: September 08, 2009 You know it's really about time that something is done about this. Enough with it already! The US needs to start making some changes if it want's to survive in this industry in the years to come. I think that it will but really the rules need to be changed! Comment by: Milton On: August 23, 2009 I'm definitely on board with everyone in regards to these matters surrounding the UIGEA. It's a stupid bill that was passed under false pretense and should be reversed immediately. Too bad government isn't that simple... Hopeful Senator Franks will have some luck passing this bill when they come back into session after the summer recess. Comment by: Sara D. On: August 16, 2009 If it were up to me it would already be reversed. I would personally really love to see regulation in the US although I feel as though this is really quite far away. I don't see states agreeing individually on the acceptance of gaming in their states. If anything is to come to pass and happen quickly I think it would need to be federally for sure. The one thing that stands though is that the UIGEA needs to be repelled! Comment by: Dino Lucci On: July 27, 2009 I noticed that the UIGEA hasn't affected many of the online casinos out there like Rushmore Casino and a few other casinos that still accept US players. I think that it's probably a good thing in that US players still have places to play and enjoy online casino gambling. Comment by: Olivia Robinson On: July 17, 2009 I'm pretty bitter about the fact that I can't play at Microgaming online casinos and the fact is that it's mainly due to this stupid bill (UIGEA). I'm definitely in support of having this thing reversed. I've even gone as far as calling my congressman for my district and voicing my opinion in regards to this... not sure what's going to happen but hopefully in the very near future we see a reversal of this bill. Comment by: Karl Benton On: July 08, 2009 The reversal of the UIGEA has to happen soon from what I understand if it doesn't financial institutions will have to implement additional facilities for blocking transactions that come from gaming related sites. I really have no idea how they're even going to attempt to approach this. Credit cards will still be a viable deposit option at online casinos there's no doubt and if not the industry will again adapt and they will find a means to take our money, lol... Comment by: Smitty On: July 07, 2009 Truly a stupid piece of legislation that will hopefully be overturned soon before they get a chance to implement provisions that would put the burden of screening all transactions that may be deemed gaming related which is what I beleive they're currently trying to do right now. Hopefully that senator Barney Frank will be able to overturn the UIGEA and prevent this from coming to be. Comment by: Bob Hathaway On: July 04, 2009 Of all the things that US has done taking away our freedom to utilize serves on the web that only infringe on the United States' ability to profit from is absolutely a breach of our rights as American's. I've read this article a few times and additionally read about the UIGEA on other sources and must agree that it's a very poor bill that should have never been passed. It just goes to show how stupid US bureaucrats really are! Comment by: T. Bugatto On: June 29, 2009 As a player from the USA myself I'm definitely in favor of the regulation of the industry and quite look forward to it actually. If the ruling of the Frank bills have a positive outcome I can foresee that the UIGEA will be completely reversed and additionally regulation set into place in no longer then 1 - 2 years at most... Comment by: Elizabeth On: June 29, 2009 I read an article online today that was mentioning that Goldman Sachs was predicting that the UIGEA was likely going to be overturned very soon by Senator Barney Frank and additional provisions and regulation for properly regulating and taxing the industry would be put into place. There's no question that it's an exciting time for the online gaming industry and that the outcome of these events will definitely play the biggest role in the future of online gaming in the United States. Comment by: Perl N. On: June 24, 2009 Yeah agreed this case right now between iMEGA basically challenging the UIGEA should be interesting. My hopes and beliefs are that there'll be a favorable ending to all this which I'm definitely looking forward to. Would be nice if Microgaming, Cryptologic and Playtech were able to operate once again in the US space. I really used to love playing at Microgaming powered online casinos it's unfortunate that the UIGEA really screwed that all up for me and 1000's of other players out there! Comment by: Hal Mason On: June 23, 2009 We're on the verge of change I really beleive that the democrats are making progress in doing something that would bring online gaming home to America. It would be definitely nice as it would induce a large number of jobs in the country and definitely help stimulate the economy if not on the short term most definitely long term there would be significant upside potential. I think it's just a matter of time now before everyone who needs to be is on board and change is made to online gambling legislation and the reversal of the UIGEA. Comment by: Raymond S. On: June 17, 2009 Well I'm fairly new to online casino gaming and I must say that I had no idea that such issues even existed... I guess that's how obliviously new I am to this whole thing. It's a real shame that the United States government hasn't done what they can to regulate the industry. Hopefully things will change in the next few terms. Comment by: Kent Wallace On: June 03, 2009 To be honest with all of you I'm ashamed of my government as a US player and someone who believes wholeheartedly in the constitution. If we want to be able to play at online casinos, sportsbooks or wager our hard earned money regardless of whether these online gambling establishments are American owned or taxed we should definitely be able to. Comment by: Sharon Wallace On: May 30, 2009 The UIGEA is a load of crap and should of been passed into law the fact that it was passed appended to another bill that was completely unrelated and irrelevant does not seem very American to me... If I want to play at an online casino I think I should be able to regardless of whether they're run by big American corporations. Comment by: Karl Benton On: May 29, 2009 Prohibition never lasts it's just a matter of time until the UIGEA is completely reversed and new law is applied that will move the country towards regulating and taxing online gaming which would have been the smart thing to do several years back. America has to keep whatever they can within the country and I'm a firm believer of the fact that they're loosing a tremendous amount of tax revenue due to offshore online gambling. Anyways like some of you I have high hopes that the new president and more importantly that the Democrats are now in power things will change sooner then later. Comment by: bentobox On: May 13, 2009 With the introduction of Barney Frank's Anti UIGEA bill it's very likely that the UIGEA will be overturned if you ask me. America has so much to benefit from this emerging market and industry and to not regulate it and tax it is utterly stupid. It has to happen it's just a matter of when! Comment by: Angie Kent On: April 28, 2009 The UIGEA is quite honestly a load of crap and really should be reversed. With a new group of minds in power now with a Democrat administration you figure that the Unlawful Internet Gaming Enforcement act would be pushed out and regulation would be put into place. Surely just by removing the UIGEA it wouldn't do much but it would definitely make US players happy in the interm. Comment by: casinowizard On: April 24, 2009 It's only really a matter of time before this bill is reversed and the US government finally realized the benefit of investing the time and effort to properly regulating the online gaming industry. Doing so would give them access to a vast tax revenue stream which would certainly offset some of the exorbitant expense of some of the military spending. Comment by: Danny Spicer On: April 06, 2009 Wow this is an incredible article on the UIGEA and I believe that you guys have done a better job then any other essay or article about the UIGEA that I've read online. Comment by: Jane Parker On: January 29, 2009 I'm a firm believer that the climate will change with respect to gaming in the USA which hopefully the rest of the world will follow in. President Barack Obama will surely institute policy changes that will allow for regulation of said industry which will directly result in additional stimulus to the US economy. Add Comment You must be signed-in to add a comment: - Sign-in - Register More Articles Chinese New Year Online Slot The Fantastic Sinbad Slot Game Romeo And Juliet In Online Slots Usher The New Year With Fluo Party Valkyrie Online Slot From Elk Top of Page

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An Analysis of the UIGEA: Legal and Practical Repercussions

By: CasinoAdvisor.com, Saturday January 5th 2008

57 Comments

Listing of U.S. Casinos Not Affected by the UIGEA and Accepting U.S. Players:

UIGEA Article Quicklinks:

Introduction

Surprise spread quickly over the online gaming industry when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed by Congress in 2006. Several publicly listed members of the gaming industry took it so seriously that they ceased taking bets from American players before even having read the Statute.

This article will evaluate the significance and impact of the Act on the gaming industry by discussing its historical background and legal consequences.

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History of the UIGEA

Congress had been attempting to pass anti-online gaming legislation since 1998. All of these efforts, however, had failed due the immense hurdles entrenched in the law making process. Each year the bill would be held up in committees by lobbyists from various interest groups wanting their piece of the pie. As a result, every legislative session Congress would run out of time before the Bill could be passed.

In 2006, however, while a Republican controlled Congress was fighting to separate itself from the corruption and scandal stemming from connections with online gaming lobbyist Jack Abramhoff, the party created an "American Values Agenda" which included prohibitions on online gaming.

Representatives Bob Goodlatte (R-VA) and Jim Leach (R-IA) lead the movement. Goodlatte said that online gambling was taking billions out of the American economy and Latte linked online gaming with threats such as identity theft, fraud, national security, and money laundering.

Polls showed, however, that the majority of citizens believed that online gaming was a personal choice and even with all of the pandering to the conservative right, the Republicans could not avoid the pending defeat in November 2006 with both Houses going to the Democrats. The Republicans did not quietly though, slipping the UIGEA through as an attachment to a Homeland Security bill just before the power shift.

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Passage of the UIGEA

In 2006, the political environment favored passing anti-gambling legislation. The scandal-ridden Jack Abramhoff had opposed anti-gambling efforts numerous times in the past and both Houses of Congress wanted to distance themselves from his past affairs. Thus, in 2006 Congress was able to pass Internet gambling legislation but nowhere near as broad or challenging as expected.

In the summer of 2006, two separate bills were introduced by the House of Representatives. The Leach Bill aimed at stopping certain electronic financial transactions (ETFs) surrounding online gambling while encouraging the cooperation of foreign governments. The Goodlatte Bill was similar to the Leach Bill but also intended to expand the scope of the Wire Act to encompass online casinos and poker rooms through a change in the definition of "the business of betting and wagering."

Due to controversies over the Goodlatte Bill, the House eventually comprised on a joint bill, which included aspects of both.

The House passed the Leach/Goodlatte Bill in July 2006 and the legislation was sent to the senate for consideration. While most analysts predicted that the Senate would run out of time before the Bill was passed, Senate Majority Leader Bill Frist (R-TN) was able to tack it onto the SAFE Port Act in the final hour. In order to achieve this without resistance or alarm, however, the controversial provision of expanding the Wire Act had to be removed. Because the Bill was now attached to nearly unstoppable Homeland Security legislation and the Wire Act provisions had been removed, the Bill's passage became inevitable.

Thus, even though the UIGEA is a reality, with the Wire Act provisions removed, there has really been no substantive change in the legal consequences than what previously existed under state and federal law prior to its passage. What it is did create is language leads to perplexities and conflicts.

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UIGEA Analysis

Language

§5363 - Prohibition on Acceptance of Any Financial Instrument for Unlawful Internet Gambling

No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person, in unlawful Internet gambling - [credit, EFTs, checks, drafts, or the proceeds of any other form of financial transaction as set forth in federal regulation].

Prior to the UIGEA, entities or persons that assisted or facilitated online gambling transaction could only be charged with aiding and abetting (substantially assisting an individual in the commission of a criminal offense makes you equally liable as the individual committing the offense) or conspiracy (knowingly and voluntarily participating in an agreement to violate the law).

With the passage of the UIGEA law enforcement officers no longer need to rely on distorting the existing laws to punish those participating in online gambling transactions (aiding and abetting requires no knowledge and conspiracy requires no crime)

Bet or Wager

the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome.

Also included in this definition is a lottery prize awarded by chance, known as a "scheme" under United States Code

28 USC §3702 Scheme

any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from, an account with the business of betting or wagering.

This is where the problem in the original language of the statute arises. The "business of betting or wagering is not defined anywhere in the UIGEA. This is how it reads,

§532(2) Business of Betting or Wagering

The term "business of betting or wagering" does not include the activities of a financial transaction provider, or any interactive computer service or telecommunications service.

While the Act tells what the "business of betting or wagering" is not, it avoids defining what it is. It is likely that the term was defined in the provision that expanded the Wire Act, which has been subsequently excluded.

The result is that by defining what the "business of betting or wagering is not" the Act as created a considerable amount of vagueness surrounding whether it applies to industry it was supposed to be directed at - "financial service providers."

Elements of a Violation of the UIGEA

To establish that an individual or entity is in violation of the UIGEA, it must be proven that,

(1) A "person" was engaged in the business of betting or wagering;
(2) That person knowingly accepted a financial instrument or proceeds thereof; AND
(3) That instrument was accepted (by the person) in connection with the participation
of another person in "unlawful Internet gambling."

Thus, when a person (individual or company) that is actively involved in the "business of betting or wagering" (as defined by §5362(1) and §532(2)) accepts a financial instrument that they know stems from that business AND it is from another person who is engaged in unlawful Internet gambling, then the UIGEA has been violated.
The problem thus becomes, what constitutes "unlawful Internet gambling?"

Unlawful Internet Gambling

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.

Thus, the UIGEA is simply a focused enforcement of the current Internet gambling laws in existence within specific jurisdictions.

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Applicable State and Federal Laws

Federal Laws

The applicable federal law criminalizing online gaming is the Wire Wager Act (Wire Act). Although the Wire Act has been used successfully against sports betting businesses, the United States Fifth Circuit Court of Appeal has read the Wire narrowly so that it does not apply to any type of gambling but sports betting.

While some other federal laws such as the Organized Crime Control Act, the Travel Act, and the Wagering Paraphernalia Act have been recognized by state courts as applying to Internet gambling, federal courts have only recognized the Wire Act thus far. In addition, federal statutes on the matter have only addressed sports betting, numbers, bolita, wagering pools, and like games.

State Laws

A large problem arises when evaluating the UIGEA under state law because each of the 50 states may have different legislation on Internet gambling. If we were to provide an analysis of the UIGEA under state law, we would need to evaluate each State's online gambling legislation, judicial interpretation, and keep a constant watch on amendments, repeals, and new legislation on the issue.

Because the act of wagering online is not expressly barred at the federal level, the UIGEA, when read narrowly, might only apply to state online gambling laws.
Aside from the insurmountable problem of analyzing the UIGEA under state specific law, a major Constitutional issue has been created. When state laws seek to regulate interstate, national, or international commerce, that law may be unconstitutional under the "dormant" Commerce Clause of the United States Constitution.

Underlying this Clause is the need for consistent and efficient transactions over state borders. Almost all state Internet regulations have been struck down under the "dormant" Commerce Clause. Although the courts have yet to deal with this issue surrounding online gambling, an extension of the Clause is likely.

Therefore, if the courts should find state laws on Internet gambling unconstitutional, the UIGEA would only be applicable under federal law where online gambling is not specifically illegal.

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Website Blocking Provisions

Under the provisions surrounding Internet Computer Services (ICS's), the Attorney General of the United States has nearly unlimited power to remove websites he or she believes are violating the UIGEA.

Although the ICS has the right of advance notice and opportunity to appear, it is ambiguous on where exactly they can "appear" and there is no mention in the Act of the procedural safeguards afforded to the website operator, who's company is about to be extinguished without the Due Process guaranteed by law.

If this were not bad enough, under the UIGEA, the US government is allowed to violate Free Speech rights through mandatory censorship. The US government can make ICS's shutdown a website without notice to the owner, thus denying their right to object.

The potential for abuse of authority under the UIGEA is overwhelming. The Attorney General can shut down a website for reason he or she desires, even on a whim.

Given that the Internet has been called "the most participatory form of mass speech yet developed" by the Supreme Court of United States, it appears that Congress has decided to ignore Free Speech rights by denying notice and right to be heard, even as the Court has afforded it so much protection.

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Foreign Jurisdictions

Because online gambling operates outside the jurisdiction of the United States, and companies frequently obtain offshore licenses, it will be difficult for the US government to enforce the UIGEA against international entities.

For this reason, the UIGEA devotes a section to this matter,

Internet Gambling in or Through Foreign Jurisdictions

Rather than creating new regulations, this section focuses on attempts pigeonholing online gambling into already existing international crimes such as money laundering, corruption, etc.
Advance policies which promote cooperation with foreign governments
Information exchanges aimed at enforcing the UIGEA
Annual report by the Secretary of the Treasury of a detailed summary of the communications between the US and other countries about online gambling

Although these policies are an excellent expression of the aspiration of the US government, the reality of their success is unlikely in all but the most serious of cases. In most circumstances, cooperation should only be expected when an actual violation of law occurs.

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Conclusion

Although the UIGEA effectively has failed at banning Internet gambling, its success and impact will be measured by certain future considerations. The ease of financial service providers in identifying and blocking restricted financial transactions under the UIGEA regulations, the reaction of service providers such as banks and NetTeller to regulations stemming from the Federal Reserve, as well as the their ability to voluntarily cooperate with such regulations will all play a part.

From a substantive legal perspective, the UIGEA is somewhat meaningless. It simply codifies prohibitions into a crime specific regulation that could have been pursued by creative uses of already existing laws. In addition, all of the new material is unenforceable for jurisdictional, constitutional, or simply inconceivable as a practical matter.

Ultimately, its real world effect is to increase the risk of operators in the industry, open up doors for small-scale entrepreneurs as the larger ones get out of the spotlight, and make the aspirations and intentions of the United States government known. The one thing it has not done is ban online gambling.

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Comment by: luciaworld On: May 27, 2011
The UIGEA is being used by government agencies right now as we speak to abolish online gambling to make way for Las Vegas based gaming groups to enter into the market without the need to compete with existing established operators already with a presence and brand recognition online. The moves set into motion including Black Friday that resulted in several indictments and domain name seizures followed by Blue Monday are blatantly obvious as per whose responsible for invoking these actions and furthermore who actually controls the Government in the United States. It's definitely not the people of the country that really have any influence whatsoever as to what's best for them and what they should get but rather the all mighty dollar and capitalistic greed facilitated though large corporations that controls the country and who does what. It's definitely not the first time we've seen private enterprise influence government action and definitely not the last. The UIGEA was the first step that has ultimately led to where we are today with respect to online gambling and recent events are a pre-cursor of what's to come. Granted there will be a huge benefit to Las Vegas gaming groups being involved in the industry, however somewhat at a loss of competition. Las Vegas gaming groups in my opinion are kind of cowardly and taking the easy way out where if they were smart they would acquire well established brands and companies with potential and leverage on their expereince. The online gaming industry is a whole other kettle of fish and they have no idea. Look at how miserably the British Columbia (Canada) government ran their online casino. The same thing is likely to come of operations being run by Las Vegas Land based gaming groups which could easily have been avoided.

Comment by: Kevin Jones On: February 10, 2011
It's my belief that that because the USA is getting more and more desperate with respect to their overspending and deficit continuing to grow and the slowing down of overall growth of country that we'll definitely see a more proactive approach to gaming laws in the very near future. From what I read New Jersey is being proactive already and is implementing their own online gambling legislation. I beleive this will mean that other states will soon follow suit. The UIGEA becomes irrelevant when the government wants to do it it's only when private operators working in an unregulated market that are capitalizing off American people that we see them wanting to take action.

Comment by: mrsparks On: February 08, 2011
I definitely wish that things within this industry were regulated with some form of dignity whereby operators actually took pride in the fact that they're able to milk this industry for the time being. You figure because of this that they'd all be honest and that regardless of things such as the UIGEA that they'd know their place. I can't wait until Vegas and larger gaming groups are able to get into this industry and take it over. I would perhaps not feel this way if I didn't feel like all online casinos were really out to take us for a ride.

Comment by: Ramone On: January 04, 2011
Regulation is definitely something that has to come to the table this year I would say. 2011 is going to be a year of change for the US economy and I beleive that wholeheartedly. The fact that offshore gaming operators are able to capitalize on this lucrative market while on land operators found in Vegas and all over the US are not is kind of ridiculous. The UIGEA was stupid and there could have definitely been a far more proactive solution to regulating the industry. This approach taken to crush the online gaming industry as it is really isn't working as gaming operators are still able to survive and continue to excel in the industry.

Comment by: jukujaka On: December 15, 2010
The UIGEA stuff is such bullshit and just an indicator of how the clash between government and the private sector exist. The law is unfounded and was past in what I would consider an illegal fashion. But this is the United States of America at the same time where everything goes and there are no repercussions for those who make the laws, unless of course they get caught banging another woman or in some cases a man, lol...

Comment by: Spencer H On: October 11, 2010
I've been watching this thing called perspectives weekly with this guy called J. Todd recently and they've been discussing the UIGEA the history and the future of what's to come. I'm not surprised though that a lot of this stuff has been facilitated by large Las Vegas conglomerates who are trying to essentially dismantle the existing online casino gaming industry in order to push though their own agenda which really is driven by their desire to fully and completely dominate the online gambling industry. It's not really all that surprising that American government is behind big well established US business in this case but it's a bloody shame as it's clear that this is just one other thing that draws this great country closer to a fascist country. It's only been a matter of time in reality!

Comment by: Sidney Blk On: September 17, 2010
Yeah it's a shame that this UIGEA bill was even ever passed. I'm so surprised that the American people aren't as frustrated as I am with this bill. I mean I'm sure there are a lot of people who are but the politicians aren't really doing much to rectify the situation which really sucks.

Comment by: oliverenchin On: August 31, 2010
I feel as though we'll see a more positive attitude from the United States government now especially in light of the fact that the Canadian government and provinces within Canada are really moving forward with online gambling. It's my prediction that we'll see the removal of the UIGEA and a more positive outlook for online gambling in the future of the United States.

Comment by: Kinton Karling On: August 11, 2010
The recent legislation that was passed is definitely a great sign that we're moving closer towards full blown regulation of the online gambling industry which is very exciting for all of us players from the United States. I know that for me personally I'm thrilled that this is going to likely come to pass in the next year or so and that we'll finally be able to do away with all the BS that has oriented from the creation of the UIGEA.

Comment by: Blake On: July 30, 2010
Quite an important milestone has now been reached in respect to Senator Barney Franks bill having been passed though the house of committee. It'll be interesting to see where things go in terms of US online gambling law over the next few months to come. I would imagine that we'll see some progress being made in the way of regulation however it's yet to be seen. The UIGEA at that point will be abolished IMO.

Comment by: Ponto Rio On: July 25, 2010
The fact that we're starting to see government bodies in North America like we've seen now with the British Colombian government in regards to their latest online gambling endeavor there is definitely a shift towards running licensed government operations in Canada so it'll just be a matter of time IMO before we see an adaption of something similar in the United States. The UIGEA will eventually be redundant as there may be a number of bills that are passed within the next few years in light of Senator Barney Franks efforts to actually regulate the industry and allow the private sector in the US to run their own online casinos, etc...

Comment by: simpleton On: June 29, 2010
I too beleive that the UIGEA is a load of crap and never should have passed. The fact that the US government is able to pass these laws in a stealth like manner by appending them to unrelated issues is ridiculous. I for one don't beleive in this crap and really wish that things were run differently here in the United States.

Comment by: Simon Tilson On: May 12, 2010
I beleive that we'll see a shift with all this come time when pressure is being made and it's that time right now. The US deficit is ridiculous right now and the government needs money. As a result I beleive that the UIGEA is irrelevant as they'll really need to implement some sort of formal regulation of the online gambling industry so that they can tax the heck out of it.

Comment by: casinofandit On: May 03, 2010
The government in the US unfortunately lacks in the progressive attitude required for them to make something out of internet gambling. The fact of the matter really isn't that online gambling is a problem in terms of it affecting the overall population of the United States but rather that the government isn't able to tax the hell out of it like they can do with everything else and thus a sort of jealousy and envy has set in. I beleive that for the government to be successful in this that they need to stop worrying about bills like the UIGEA and enforcing such bills but rather to implement regulation and policy that would allow land based gaming groups to legitimately get involved. There's no doubt that many of us players from the United States would immediately shift to a Wynn online casino over a no name online casino operation that really bears no significant recognition.

Comment by: badchristian On: April 28, 2010
The UIGEA really needs to be overturned IMO for this industry to be successful where the government in the US is actually able to tax it. Working with the people that have endless experience in the industry is the way to go. Otherwise Vegas, Atlantic City and the Natives may get involved but really end up loosing their shirts if they don't execute on things properly. It would make most sense if land based gaming groups were to just buy up the entire online gambling sector and leverage all that... I doubt that it would happen but would really be great if it did.

Comment by: kristoph On: April 20, 2010
Damn seems like the politicians here in our country really want to make things difficult for us with things like the UIGEA and their attempts to implement prohibitory parameters surrounding the online gambling industry. Firstly it's really not going to work and secondly it's just going to push the industry further underground and open up the doors to more unscrupulous and unsavory characters to get involved. I don't think that it's going to really work to be honest and the UIGEA is all B.S. especially how it was passed which doesn't make most of us look that favorably onto our representatives in government. Maybe bigger changes are needed :)

Comment by: blizzard777 On: April 13, 2010
I for one as an American am very much disappointed at how my liberties are being treated when it comes to matters of being able to gamble online. I don't beleive that the government should be going after or targeting companies that are based over-seas seems like a real infringement of free-trade and agreements that were made by the US many years back. I think that this law or whatever comes of it should be dissolved.

Comment by: Kayle S. On: April 03, 2010
Yeah the UIGEA and all this is really unfortunate and I have to agree that I beleive that it will all be overturned soon and hopefully that time comes sooner then later.

Comment by: Ben Kaylington On: April 02, 2010
I wish that things weren't so difficult for you American folks. I beleive that some of the new things being discussed right now could result in the UIGEA being removed completely and there being some sort of formalized regulation of the industry which would in all honesty be superb for everyone!

Comment by: Pilav On: March 24, 2010
The UIGEA should really be tossed out and they should leave us to play in peace. I mean that would be the most ideal thing that could happen here with the Unlawful Gaming Act however it's not likely that this will happen. I would like to see it being repelled and all this great stuff happening but the rich and elite in the US won't let this happen I don't beleive and thus the UIGEA come the summer will probably be in full swing in terms of there being laws that will accompany it.

Comment by: chris1004 On: March 07, 2010
Me personally I think that I'd really like to see the whole industry regulated. I mean I do kinda (lol...) beleive in paying my taxes and thus would like to leverage both my losses as wins when doing my annual taxes. That's right one of the benefits of being able to play online would be that you can claim your losses. In land based casinos you can't do that as there's no way for them to really track your losses however since the online systems for gaming are all tracked and the information is all stored it's definitely possible to do it. Thus the UIGEA is a waste of time if you ask me and they should have jumped straight to full on regulation of the gaming industry. Just my opinion of course.

Comment by: raytheon On: March 03, 2010
I guess with the June deadline approaching all big credit card issuers are starting to freak out a bit and as a result have implemented these darn blocks on credit card transactions over and above what they've already been doing. The UIGEA is a bunch of BS as is the US governments involvement in this. It's a real shame and I have to say that I'm disappointed in my country yet again.

Comment by: Wrinkle On: February 25, 2010
I don't really think that anyone is looking forward to the inevitable but it looks like we're really on the bring of having some real issues with credit card deposits at online casinos and gambling sites online in lieu of all this. I really don't see the UIGEA being repelled at this point but rather that implementation of proper regulation that will need to be adhered to by financial institutions in the United States is likely what will happen. Anyways I don't want to get my hopes up or upset one way or the other and will wait to see what happens with all this.

Comment by: player111 On: February 23, 2010
I'm not too worried about it to be honest. It's just a big scare tactic really. There really isn't anything they can do to truly shut down the online casino industry sort of physically going into each of the countries where the gaming servers that provider the ability for people to play online and shut those down. I think we all know that this is something that would never happen!

Comment by: burtman On: February 18, 2010
The UIGEA laws that are supposed to be coming into effect this June are already being felt by the online gaming community. They've managed to find ways to deal with preventing first time MasterCard depositors from being able to deposit at online casinos. It's already been seen however to have been a temporary fix for MasterCard and will likely be that way for all other credit card companies. I don't think that anything they do in terms of implementing UIGEA policy to regulate it will actually work. The online gambling industry will always find away around this stuff. They just have to deal with the fact that online gambling will be around for ever.

Comment by: Nathan Black On: February 07, 2010
It's really getting tiring the whole thing with online gambling in the US and especially with that of the UIGEA. I think that we'd be in a much better position in the US if things were just left along and those who opperate these offshore online gambling companies were able to do so at their own liberty. For a country so bent on freedom this seems like definitely something they should allow.

Comment by: Channy On: February 02, 2010
I myself am a big fan of playing at online casinos and really know that if we had Vegas backing the brand that were online that we'd not only be safer but it would open up the world to a whole new scenario for merging between online casinos and land based casinos that we've never seen before. The UIGEA is stupid and should be repelled ASAP while they deal with the regulation side of things!

Comment by: Titan123 On: January 26, 2010
I just actually submitted a post in the forum and message board about this but figured might be good to post here as well. Playtech has just signed a deal with a US company which would indicate that there are things happening here and that regulation will hopefully be set into motion soon. The company that Playtech has made this deal with is a company that specializes in technologies that are geared towards regulating the gaming industry. So whether it be online casinos, poker rooms, etc... this is a very good sign. As for UIGEA I beleive that when we see the first bills pass for the regulation of the online gaming industry that the UIGEA will simply be dissolved and declared redundant

Comment by: Tealmantis On: January 14, 2010
I've heard that they are on the ball with the UIGEA and that there should be some sort of resolve with it this year in 2010. I think that for all online casino and particularly online poker players out there that this new foundry solution to a big problem in the United States with regards to offshore unregulated gambling. This will really be a milestone in the history of the online gambling industry if we do see some form of regulation come about this year.

Comment by: Elise Richi On: January 04, 2010
A real shame where things are and the way that you all feel towards this as I am a big supporter of the banning of online casinos and gambling on the internet all together. I have become a victim myself of excessive gambling. I know that it's not my fault nor is it the casinos fault it's just one of those things but I'm in favor of the UIGEA and the government taking control in preventing people like me from being carried away. I'm certain that better and more efficient control measures would come into place if the government was to license and regulate online gambling but long run rise I think that there would still be people that just get more and more into debt over the bloody thing!

Comment by: Joe Hodges On: December 20, 2009
From my perspective as a US player I think it's outrageous that the government would try to ban and outlaw an activity that I engage in that takes place over seas. It's a blatant violation of our constitutional right and these bloody politicians really need to be stopped. The UIGEA should 100% be repelled and if it doesn't I could only imagine that the long terms effects would be. This is only the beginning of the further removal of our rights as American citizens.

Comment by: Thorton On: November 14, 2009
Agreed. The way politics are these days and for an issue like this I don't think there's as much motivation to see this thing though to a point where the Government is making money right now. Not because they don't want the money they're desperate for the money but because I think they're focusing their efforts on issues that are far more pressing and require more immediate attention. The UIGEA is stupid and wasn't passed into law in a just way from what I've read and know about it but this is US politics for you.

Comment by: Billy Minor On: October 30, 2009
Certainly would be great to see a change soon but don't expect things to happen too fast I really don't think that they do because when it comes to this sort of stuff. I think that we will definitely see regulation of the online gambling industry I just don't think that it'll be for at least a few years to come.

Comment by: Stephen P. On: October 17, 2009
Progress is being made and the fact that we don't have an implementation of the UIGEA right now that makes it fully illegal for banks to process credit card and banking transactions that support the gaming industry is great. I hope that there is some sort of long term resolve though as it would be great to see online casinos regulated and licensed properly!

Comment by: Stella W. On: October 08, 2009
For one I would be appreciative in the freedom of playing without illusive methods that need to be applied right now for this industry to survive. I would prefer playing at legitimate online casino brands that are backed by land based casinos where there's some cross over. As for the UIGEA I think that it's pretty dumb and as for how this bill was passed shows how corrupt our governmental system with regards to issues like this really is. I hear that the treasury department is now in the process of implementing a policy for the governance and implementation of the UIGEA should be interesting to see what comes of it.

Comment by: Dark Matter On: September 23, 2009
As a big supporter of freedom I think that anyone in the United States who wants to gamble should be able to at their own leisure. The fact that the UIGEA directly impacts the ability for players to do and play what they want is obviously a breach of rights and against the constitution. I think that things really need to change and framework needs to be put into place within America that allow players to play at their own will. I don't think that the wild west of online casinos is a good idea and that better more reputable regulatory bodies need to be put into place but still the UIGEA is just wrong and should be reversed ASAP.

Comment by: Randy D On: September 08, 2009
You know it's really about time that something is done about this. Enough with it already! The US needs to start making some changes if it want's to survive in this industry in the years to come. I think that it will but really the rules need to be changed!

Comment by: Milton On: August 23, 2009
I'm definitely on board with everyone in regards to these matters surrounding the UIGEA. It's a stupid bill that was passed under false pretense and should be reversed immediately. Too bad government isn't that simple... Hopeful Senator Franks will have some luck passing this bill when they come back into session after the summer recess.

Comment by: Sara D. On: August 16, 2009
If it were up to me it would already be reversed. I would personally really love to see regulation in the US although I feel as though this is really quite far away. I don't see states agreeing individually on the acceptance of gaming in their states. If anything is to come to pass and happen quickly I think it would need to be federally for sure. The one thing that stands though is that the UIGEA needs to be repelled!

Comment by: Dino Lucci On: July 27, 2009
I noticed that the UIGEA hasn't affected many of the online casinos out there like Rushmore Casino and a few other casinos that still accept US players. I think that it's probably a good thing in that US players still have places to play and enjoy online casino gambling.

Comment by: Olivia Robinson On: July 17, 2009
I'm pretty bitter about the fact that I can't play at Microgaming online casinos and the fact is that it's mainly due to this stupid bill (UIGEA). I'm definitely in support of having this thing reversed. I've even gone as far as calling my congressman for my district and voicing my opinion in regards to this... not sure what's going to happen but hopefully in the very near future we see a reversal of this bill.

Comment by: Karl Benton On: July 08, 2009
The reversal of the UIGEA has to happen soon from what I understand if it doesn't financial institutions will have to implement additional facilities for blocking transactions that come from gaming related sites. I really have no idea how they're even going to attempt to approach this. Credit cards will still be a viable deposit option at online casinos there's no doubt and if not the industry will again adapt and they will find a means to take our money, lol...

Comment by: Smitty On: July 07, 2009
Truly a stupid piece of legislation that will hopefully be overturned soon before they get a chance to implement provisions that would put the burden of screening all transactions that may be deemed gaming related which is what I beleive they're currently trying to do right now. Hopefully that senator Barney Frank will be able to overturn the UIGEA and prevent this from coming to be.

Comment by: Bob Hathaway On: July 04, 2009
Of all the things that US has done taking away our freedom to utilize serves on the web that only infringe on the United States' ability to profit from is absolutely a breach of our rights as American's. I've read this article a few times and additionally read about the UIGEA on other sources and must agree that it's a very poor bill that should have never been passed. It just goes to show how stupid US bureaucrats really are!

Comment by: T. Bugatto On: June 29, 2009
As a player from the USA myself I'm definitely in favor of the regulation of the industry and quite look forward to it actually. If the ruling of the Frank bills have a positive outcome I can foresee that the UIGEA will be completely reversed and additionally regulation set into place in no longer then 1 - 2 years at most...

Comment by: Elizabeth On: June 29, 2009
I read an article online today that was mentioning that Goldman Sachs was predicting that the UIGEA was likely going to be overturned very soon by Senator Barney Frank and additional provisions and regulation for properly regulating and taxing the industry would be put into place. There's no question that it's an exciting time for the online gaming industry and that the outcome of these events will definitely play the biggest role in the future of online gaming in the United States.

Comment by: Perl N. On: June 24, 2009
Yeah agreed this case right now between iMEGA basically challenging the UIGEA should be interesting. My hopes and beliefs are that there'll be a favorable ending to all this which I'm definitely looking forward to. Would be nice if Microgaming, Cryptologic and Playtech were able to operate once again in the US space. I really used to love playing at Microgaming powered online casinos it's unfortunate that the UIGEA really screwed that all up for me and 1000's of other players out there!

Comment by: Hal Mason On: June 23, 2009
We're on the verge of change I really beleive that the democrats are making progress in doing something that would bring online gaming home to America. It would be definitely nice as it would induce a large number of jobs in the country and definitely help stimulate the economy if not on the short term most definitely long term there would be significant upside potential. I think it's just a matter of time now before everyone who needs to be is on board and change is made to online gambling legislation and the reversal of the UIGEA.

Comment by: Raymond S. On: June 17, 2009
Well I'm fairly new to online casino gaming and I must say that I had no idea that such issues even existed... I guess that's how obliviously new I am to this whole thing. It's a real shame that the United States government hasn't done what they can to regulate the industry. Hopefully things will change in the next few terms.

Comment by: Kent Wallace On: June 03, 2009
To be honest with all of you I'm ashamed of my government as a US player and someone who believes wholeheartedly in the constitution. If we want to be able to play at online casinos, sportsbooks or wager our hard earned money regardless of whether these online gambling establishments are American owned or taxed we should definitely be able to.

Comment by: Sharon Wallace On: May 30, 2009
The UIGEA is a load of crap and should of been passed into law the fact that it was passed appended to another bill that was completely unrelated and irrelevant does not seem very American to me... If I want to play at an online casino I think I should be able to regardless of whether they're run by big American corporations.

Comment by: Karl Benton On: May 29, 2009
Prohibition never lasts it's just a matter of time until the UIGEA is completely reversed and new law is applied that will move the country towards regulating and taxing online gaming which would have been the smart thing to do several years back. America has to keep whatever they can within the country and I'm a firm believer of the fact that they're loosing a tremendous amount of tax revenue due to offshore online gambling. Anyways like some of you I have high hopes that the new president and more importantly that the Democrats are now in power things will change sooner then later.

Comment by: bentobox On: May 13, 2009
With the introduction of Barney Frank's Anti UIGEA bill it's very likely that the UIGEA will be overturned if you ask me. America has so much to benefit from this emerging market and industry and to not regulate it and tax it is utterly stupid. It has to happen it's just a matter of when!

Comment by: Angie Kent On: April 28, 2009
The UIGEA is quite honestly a load of crap and really should be reversed. With a new group of minds in power now with a Democrat administration you figure that the Unlawful Internet Gaming Enforcement act would be pushed out and regulation would be put into place. Surely just by removing the UIGEA it wouldn't do much but it would definitely make US players happy in the interm.

Comment by: casinowizard On: April 24, 2009
It's only really a matter of time before this bill is reversed and the US government finally realized the benefit of investing the time and effort to properly regulating the online gaming industry. Doing so would give them access to a vast tax revenue stream which would certainly offset some of the exorbitant expense of some of the military spending.

Comment by: Danny Spicer On: April 06, 2009
Wow this is an incredible article on the UIGEA and I believe that you guys have done a better job then any other essay or article about the UIGEA that I've read online.

Comment by: Jane Parker On: January 29, 2009
I'm a firm believer that the climate will change with respect to gaming in the USA which hopefully the rest of the world will follow in. President Barack Obama will surely institute policy changes that will allow for regulation of said industry which will directly result in additional stimulus to the US economy.

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Casino > Casino Articles > > An Analysis of the UIGEA: Legal and Practical Repercussions

An Analysis of the UIGEA: Legal and Practical Repercussions

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