Passed in the United States in 2006, the Unlawful Internet Gambling Enforcement Act is the primary reason why many online casinos, sportsbooks and poker rooms do not accept American users. Since its introduction, the UIGEA has become the topic of much debate, with some legislators attempting to repeal or amend the act. However, the UIGEA remains in effect for the time being, restricting the availability of online gambling for U.S. citizens.
What the UIGEA Does
The UIGEA is intended to prevent banks and financial institutions from processing payments to and from gambling sites. This is the reason why American gamblers often have difficulties using certain deposit methods at online casinos. In the months after the bill was passed, a crack down on sites that accept American deposits occurred, with several major online gambling companies like SportsBet and Party Poker settling with the U.S. government out of court. However, no gamblers to date have been prosecuted for failing to abide by the UIGEA. Also, some gambling sites have blocked certain American IP addresses in order to avoid blame for violating the UIGEA.
How the UIGEA Affects the Online Gambling Industry
As soon as the UIGEA was passed, some online gambling companies began ceasing service to American customers. This was especially common among larger, publicly-traded companies that wished to avoid backlash from shareholders. Later, certain payment processing services stopped accepting American customers. Interestingly, most companies that were associated with U.S. online gambling community reacted instantly, rather than waiting for the government to enforce the UIGEA. However, since the UIGEA fails to provide a comprehensive definition of what constitutes online gambling, many offshore gambling sites continue to offer services to American individuals.
Criticism of the UIGEA
Since the act’s passage, there has been considerable reaction against the UIGEA. For instance, non-profit organizations like the Poker Players Alliance (PPA) have lobbied for increased online gambling rights. With a membership of over 2 million people in 2008, groups like the PPA can significantly affect the future of online gambling. The PPA takes particular issue with the fact the UIGEA bans online poker but allows betting on horse racing, dog racing, fantasy sports and state lotteries.
Numerous legislators have made attempts to combat the UIGEA, but none have been successful thus far. The most recent individual to take action against the UIGEA is Congressman Barney Frank. Congressman Frank has proposed several anti-UIGEA measures including HR 2046, also known as the Internet Gambling Regulation and Enforcement Act. Instead of banning online gambling outright, this act would subject the Internet gambling industry to more thorough regulation. Additionally, the government would be able to impose licensing requirements on online gambling sites. In fact, some critics of the UIGEA have argued that many Americans still gamble online illegally. Eliminating the UIGEA and regulating online betting sites would create a safer, more consistent gambling experience for individuals across the country.
