The UIGEA and How It is Changing the US
In 2006 the UIGEA, or Unlawful Internet Gambling Enforcement Act, was brought into legislation. The point of the law was to thwart illegal gambling online to protect consumers. Although this was its intention, the law had some other results. The UIGEA ended up targeting financial institutions. They were tasked with the overwhelming task of flagging and denying any transactions that were affiliated with online gambling. Banks didn’t like the change because it costs money for them to alter their procedures to account for the new checks. In the end, the UIGEA ended up creating a lot of problems because other forms of gambling that were meant to be legal, like lotteries and sports betting, were thrown into the mix and banks seized those funds too.
When it comes to the online casino world, they were equally as thrown by the UIGEA rule. Many chose to leave the market. For example, Party Gaming issued a statement that read, “The Board of Party Gaming has determined that if the President signs the Act into law, the Company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation.”
Many online casinos were scared and decided to alienate the US market altogether as a way to avoid breaking any laws in the world of online gambling. A lot of companies were as conservative as Party Gaming. When companies left the US market, online gamblers were left with no choice but to move to offshore gambling companies. The problem is that they then channeled billions of US dollars out of the country. One legislator said, “Every day the US does not put laws in act to accept online slots and gambling, is another day the country is losing millions of dollars in potential revenue.” With the numbers when it comes to gambling as high as they are, it’s a difficult to pass up the huge revenues. In particular because of the huge US deficit, it’s imperative that more legislation is put into place to legalize and regulate online gambling.
Tags: law, Party Gaming, UIGEA
