The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed by the US Senate on Friday October 6, 2006, and was signed by President Bush on October 13, 2006. It was added as an amendment to the SAFE Port Act of 2006, seen by many senators as a "must-pass" law which increases port security around the United States.

The UIGEA does not actually ban online poker or internet gambling - instead, it makes it a crime for a bank or financial institution to knowingly fund an online gambling account. It also makes it a crime for a wagering site to accept a bet from a user if the site knows that user is placing an illegal wager. However, it makes no changes to the current definitions of illegal wagering.

Placing an Illegal Wager Edit

Online poker in the United States is generally regulated by the individual states (though the current Department of Justice has asserted that the Wire Act outlaws online poker in the entire country, it is unlikely that this opinion is supportable in the courts). In New Jersey, online poker is apparently legal. In Washington state, it is banned. In California, it is generally considered to be legal as long as it does not rake a percentage of the pot (though no lawsuit has tested this interpretation yet). It is unclear how poker sites will interpret this section of the UIGEA.

Firstly, most online poker sites are headquartered outside the borders of the United States, and hence are not subject to the jurisdiction of US law. Secondly, it is unclear how poker sites will know that a user is placing an illegal wager. While a poker site may know a player's mailing address (or may not), they are unlikely to be able to detect that actual physical location of the player's computer.

Some poker sites (notably PartyPoker, PokerRoom, and have reacted to the new law in a conservative fashion: once President Bush signed the bill, they immediately banned US players from their real money tables (and from making deposits to their accounts). While Party Poker does not actually fall under US jurisdiction since they are based in the United Kingdom, they have stated that they do not want their employees to be considered American criminals, subject to arrest upon arrival in the US. See their press release announcing this new policy.

Some sites, such as Doyle's Room, initially took a wait-and-see attitude, but have subsquently banned US players from their site. In the case of Planet Poker, they have now subsequently banned all real-money games regardless of the player's country of origin. (See Planet Poker's press release)

Still other poker sites (such as PokerStars and Full Tilt Poker) have taken a wait-and-see attitude and are still planning no changes in operations. (See Full Tilt's announcement)

Funding a Gambling Account Edit

It is also unclear how the funding part of the act will be enforced. As pointed out by Allyn Shulman, the legal analyst at Card Player Magazine, banks and other financial institutions have very little desire to become "policemen", and indeed it is unclear how they could. Perhaps some forms of transfers (e.g. credit card funding) will end up being prohibited, but it seems unlikely that all forms of money transfer will be stopped. The legislation as passed provides financial institutions with a 270 day period with which to investigate and develop procedures for policing money transfers. This period will end sometime in July 2007.

Also, many online players use one of the various online poker payment services to fund their poker account, which means they are not actually funding gambling accounts directly from their American bank accounts. Since services like Neteller are essentially offshore banks which can be used to purchase goods and services, it is unclear that the funding portion of the UIGEA even applies to money transfers into or out of these services.

Even so, at least two of these services, FirePay and Neteller, have decided to prohibit transactions from American customers for the time being (see the article at CardPlayer and Neteller.

Prospects for repeal Edit

Both houses of Congress changed in hands following the 2006 election, and Democratic control offers some prospects of repeal for the UIGEA. Barney Frank (D-MA) introduced the Gambling Regulation and Enforcement Act of 2007 (HR 2046) on 26 April 2007. This bill would "create an exemption to the ban on online gambling for properly licensed operators, allowing Americans to lawfully bet online", effectively repealing the complications for US poker players. [1]

Bottom line Edit

In any case, it seems clear that there are still many aspects of the law to be fleshed out. While online players are bound to be affected by the new law, it is unclear the extent to which any will feel direct effects. Instead, it seems that the ripple effect of other companies reacting to the law will have the greatest impact on the sport.

Discussion Edit

The Two Plus Two forums have a board devoted to legislation. This particular piece is being discussed thoroughly there. 2+2 Legislation forum

Reference Edit

  1. Template:Cite web

Ad blocker interference detected!

Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.