*Note – We are not lawyers so do not take this as professional legal advice. We have done hours of research on this topic and feel comfortable to discuss it with you, but still – there’s our disclaimer.
The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) is a piece of tyrannical legislation that was rammed down Americans’ throats minutes before the election period recess of 2006. It was attached to a completely unrelated piece of must-pass legislation called the SAFE Port Act.
The SAFE Port Act was designed to add security measures to our country’s ports and it was considered must-pass legislation. In the last few minutes before the SAFE Port Act was voted on, the UIGEA was attached and jammed through Congress. The timing of this attachment was convenient, as people who voted on the SAFE Port Act admitted later that they had zero chance to read the bill in its entirety – including the part that contained the UIGEA.
The UIGEA and the Legality of Online Poker
Contrary to popular belief, the UIGEA did not outlaw online poker, online gambling or online sports betting. Instead, the UIGEA prohibited the transfer of funds from a financial institution to internet sites that host any form of online gambling. Because the doofuses that make the rules think that poker is the same as gambling, this also affected online poker sites.
The good news from the player’s point of view is that the UIGEA did not criminalize the act of playing online poker. In essence, the only people who really had to worry about the UIGEA were banks and payment processors that conduct these kinds of transactions. If you’re just a normal individual poker player, you don’t have anything to worry about in regards to the UIGEA.
Effects of the UIGEA
Not surprisingly, the UIGEA was a complete and utter failure. This is to be expected when people who have no knowledge of the industries they legislate pass sweeping legislation. However, two things did happen after the UIGEA was passed:
1. Some poker sites left the US market
A few large poker sites left the US market after the UIGEA was passed. These were publicly traded companies that didn’t want to deal with the headache and quasi-legality of running international poker sites. We were most saddened to see Party Poker and 888 Poker leave the US market.
2. Some banks stopped processing credit card transactions to poker sites
This is the only other major effect that has been felt by players since the UIGEA took effect. Some banks caved in to pressure from the government and set up systems to detect credit card and debit card deposits to online poker sites. This is the reason why some of you have problems depositing with your credit and debit cards.
Fortunately, there are still plenty of ways to play real money poker on the internet. New deposit methods have hit the market and players are still able to deposit and withdraw from online poker sites at will. It is clear today that the UIGEA was not the end of the world.
You can read more about the UIGEA and the SAFE Port act at Wikipedia.
Unintended Consequences of the UIGEA
Any time a government passes sweeping legislation, there are bound to be unintended consequences. Here are just a few unintended consequences of the UIGEA:
1. Players are not protected from unscrupulous operators
One of the biggest arguments for the UIGEA was the protection of American citizens from unscrupulous casino / poker / sports betting operators. More specifically, it was argued that online gaming sites could take your money and run any time they want.
Not surprisingly, the only thing the UIGEA has done is pushed the industry even further underground. Thanks to laws such as the UIGEA, players have no choice but to play at privately traded companies. Fortunately, there are a few major companies that have proven themselves to be safe places to play.
Instead of setting up a system to license and regulate online poker, online gambling and online sports betting, the UIGEA just pushed it all underground. So now there are no standards for enforcing age limits, deposit rules and cashouts at online gambling sites. Thanks a lot UIGEA.
2. Players have had their money frozen
One of the biggest boogey-men the UIGEA was supposed to protect us from were all the evil, no-good gambling sites out there that were just waiting to steal all our money. Instead, the government has attacked payment processors (remember Neteller?) and has frozen players’ funds for months on end.
So did the government protect us from those evil poker sites, casinos and sportsbooks? Nope, they are all still alive and well. The funny thing is that those aren’t the people who have stolen money from the players – the only thief so far has been the US government. Figures.
3. The USA has moved one step closer to tyranny
Apparently, the government now thinks it has the right to pick and choose how adults spend their own money in their own homes. In what was once the Land of the Free, there are now thousand page laws passed left and right without the consent of the people. The UIGEA was not wanted by the American people, it was not voted on but yet it was passed.
Surprisingly, the UIGEA was pushed mostly by republicans. These are the same people who claim they are sick and tired of too much government control, too much intervention and too many laws. Yet here they are right now telling us that we can’t play a little online poker even though there are live casinos all over the place. But don’t go thinking that the democrats are any better – they too will do anything to remain in power.
What happened to the days where politicians stayed the hell out of our lives? How have we gotten to the point where students are expelled from school for wearing American flags? Let’s get back to the hands-off approach and free market principles that made this country the land of the greatest opportunities in the world.
The UIGEA and Online Casinos
The UIGEA had pretty much the same effect on online casinos as it did on online poker sites. Some online casinos continued with business as usual; others left the US market. Today, casino players all over the world have access to hundreds of online casinos. Not a whole lot has changed except some players have problems depositing with credit cards and debit cards.
The UIGEA and Online Sports Betting
Same deal here as well. The UIGEA did not close down sportsbooks or pass any laws outlawing sports betting. All it did was make it a little more difficult for US sports bettors to deposit to online sportsbooks. Some online sportsbooks still serve US players; others have left the market.
The following snippet comprises the most important part of the UIGEA. For a full, unabbreviated text of the UIGEA, please visit this page.
Regarding Financial Transactions:
`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–
`(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);
`(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;
`(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or
`(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person.