US Online Casino Banking Scenario

5 Comments   Email   Print

The online casino scenario in the United States is different from many other parts of the world. This is because of the opposition to online gambling from the United States government. Many online gambling operators do not accept players from the United States. And those operators who do accept American players offered limited banking options.

The UIGEA rules will prevent financial institutions from processing payments to online casinos. Though the rules have not yet become effective many credit card companies are blocking online gambling transactions. Therefore credit card rejections at online casinos have gone up in the United States. Till recently Amex credit cards did not report any such rejection problems and was the preferred credit card for American players. However of late rejection problems have surfaced with Amex credit cards as well. Therefore alternative payment options like electronic wallets are becoming more popular in the American online casino industry. Some electronic wallets like Neteller have withdrawn from the American market. However many others like UseMyWallet still function in America and are providing good service. Players who can wait a while for receiving their payouts prefer getting their funds through paper checks or wire transfer.

Even though the UIGEA rules will become effective only from June 1, 2010, the Department of Justice (DoJ) is initiating prosecutions against individuals and organizations engaged in processing funds for online gambling under existing laws. In 2009 several such organizations were indicted for processing payments for online casinos and forwarding the payments to the players. Funds were seized by the Department of Justice and criminal prosecutions initiated against the processors. The scenario will become bleaker once the UIGEA rules are implemented.

However, there is every chance that the UIGEA will be repealed. There is a strong lobby working to get online gambling legalized and regulated. Spearheading the movement is the anti-UIGEA bill sponsored by Representative Barney Frank. Though this bill was introduced in May 2009 it was held up because of more pressing financial bills. It is expected to be voted by the House Committee very soon. A similar bill has been introduced in the Senate. The only problem is that time is running out. In two and a half months the UIGEA rules will become effective and a second postponement seems unlikely.

There is another factor that is moving in the favor of online gambling in the United States. The judicial opinion seems to be that if the states allow online gambling then the UIGEA will not apply in those states. Many of the states are strapped for cash because of the economic downturn and have taken steps to legalize at least certain forms of online gambling. Once states to do that then payment processing for online casinos will not be illegal in those states and funding of online casino accounts can continue unfettered.

Even in the worst-case situation of the UIGEA being implemented, online casinos cannot be wiped out. Online gambling is so firmly entrenched in the United States that the government can make it difficult for people to gamble online but it cannot eradicate online gambling. The online gambling industry will find innovative means of bypassing the rules and regulations imposed by the government. Some financial services providers are already offering pre-paid vouchers that can be purchased for cash at retail outlets and the code transmitted electronically to online casinos. This enables the funding of the players account and the organized financial channels are completely bypassed.

While the online casino industry is prepared for the worst it is hoping for the best. The next few months will decide one way or the other.

Article Tools

 Email     Print     Digg     Del.icio.us    StumbleUpon

Comments

 Add Comment

Add Comment

More Articles