The UIGEA Resurrects Itself

Casino BankingThe UIGEA Resurrects Itself

The Unlawful Internet Gambling Enforcement Act of 2006 has long been thought of as being the black day of the online gambling industry. At that point in time the United States was the major online gambling market in the world and with very few online gambling companies diversified into other areas, the UIGEA cut off many online gambling companies from the US market and in doing so devastated the value of their stock. At that point it seemed as though the social conservatives in the United States had come a long way towards their goal of completely eliminating this particular activity and it certainly did mark the high point of their power insofar as this particular issue was concerned.

There were problems with the UIGEA as many people know already. The main problem was that it did not define the difference between a lawful and an unlawful internet gambling activity and for that reason even things like betting on horse racing that was exempted from the online gambling ban aspect of the bill could still end up being banned in the process of the bill being put into place by the federal law enforcement agencies. The legislation was a mess and for that reason the people that created it were turned on not only by their own base of the social conservatives but also by the online gambling advocacy organization as a whole which managed to boot out all of the ring leaders in this particular bill in the midterm elections of 2006.

Just a few months ago a Democratic congressman by the name of Barney Frank was responsible for pushing a bill through the House Committee on Financial Services that would have required federal authorities to specifically define the difference between lawful and unlawful internet gambling. This in turn would allow financial institutions blocked from making transfers to unlawful internet gambling websites in the UIGEA to at least know how to tell if a particular website was considered unlawful by the federal government rather than the current situation which was one of complete uncertainty and therefore complete withdrawal from the market for fear of being fined by the federal government for making a money transfer to a website they deemed unlawful.

However, it appears as though that bill is not going to have time to make its way into the public debate of the United States Congress because the Bush Administration has now decreed that the stipulations in the UIGEA need to be in place by December 1, 2009. At stake are penalties of fines and imprisonment for top employees of companies that fail to observe the UIGEA and when this strict hard line approach is combined with the uncertainty that still exists regarding the basic definition of unlawful internet gambling, the end result is something that will most likely tantamount to chaos as federal agencies end up going after anything related to online gambling. Only time will tell if that is true, however and for the sake of online gambling one would hope not.

July 12, 2011 by : posted in Industry and Economy No Comments