UIGEA - the law which bars you from online gambling
UIGEA - what is it?
UIGEA or Unlawful Internet Gambling Enforcement Act is an act which bars American people from financing online gambling activity through EFTs (Electronic Fund Transfers), credit cards or checks.
It is very important to mention here that UIGEA doesn’t deal with actual online betting or gambling practices. UIGEA only deals with the fact – How online gambling accounts are funded? UIGEA doesn’t make online gambling illegal. It makes the financial transactions associated with online gambling illegal.
UIEGA was passed by US Congress in 2006 as an attachment to SAFE Port Act (whose main objective is to increase US Port security).
UIGEA - what does it try to do?
Intention of Unlawful Internet Gambling Enforcement Act (UIGEA):
- It tries to restrict certain financial transactions pertaining to gambling
- It also requires the banks to identify and block those accounts which deals with financial transactions related to online gambling
- It expects the online gambling websites to stop/block online gambling related financial transactions.
UIGEA - does it have any effect on online gambling?
Unlawful Internet Gambling Enforcement Act (UIGEA) already had far reaching consequences on online gambling industry in America.
- Websites barred American players (New as well as Old) Many big players in the online gambling industry barred Americans from accessing their service after UIGEA became a law. These websites also cancelled old American accounts registered with them and allowed these old account holders to withdraw their fund from the websites.
- Online gambling sites registered with stock exchanges heavily lost their value Many online Poker rooms which are registered with London Stock Exchange or other stock exchanges were also hit hard. Some of the well known names like Partygaming Plc. (parent company of Party Bets and Party Poker) saw erosion in its value by 70% within a period of 24 hrs after the announcement of UIGEA inception.
- Top level executives of online gambling companies were arrested on randon crime after UIGEA was made a laws Peter Dicks and David Carruthers, Chairman of SportingBet and Chief Executive of BetOnSports respectively, were charged with random crimes associated with state laws on online gambling and were consequently arrested. Peter got a bail on personal bond of $50,000 but David is still under house arrest.
- Online payment processors were also hit hard After the announcement of UIGEA as a law, many online payment processors had to drop all or some businesses with their American customers. Funds of many American players with websites like Neteller, Firepay and Moneybookers were frozen.
UIGEA - doesn't it affect the clauses of free trade as per WTO?
WTO, the international organization supervising liberalization of trade internationally, received a complaint from the island nation Antigua and Barbuda on 19th June 2007. It charged USA of violating international trade laws, as laid down by WTO. Antigua claimed an amount of $3.4 billion from United States violating international trade law. It also requested for an authorization for ignoring US Patent and Copyright Law.
On 21st December 2007, WTO awarded $21 million in trade sanctions to Antigua and Barbuda. This will help the country to penalize trademark and copyright laws of U.S. In fact, America had to admit that the prohibitory online gambling law, UIGEA, is violating international trade. After this, America made an agreement with Antigua for settling the dispute. This agreement was not made public and many believe that Bush government had given many concessions in other fields to Antigua for settling the dispute.
UIGEA - can anything be done?
US Congressman Barney Frank, last year, tried to repeal UIGEA but failed to do it. But this year he is trying to turn the table and get UIGEA repealed. This year he is confident of scraping this law and bringing a new bill called Internet Gambling Regulation, Consumer Protection and Enforcement Act.