3 June 2010
With a target date of 2008 for implementation, the Unlawful Internet Gambling Enforcement Act (UIGEA) finally came into effect in the USA on 1 June. UIGEA was originally approved back in 2006 but implementation was delayed because of protests from civil liberties groups and the vague nature of the legislative text. The UIGEA requires financial institutions to block transactions to and from online gambling websites and effectively enforces a ban on online gambling.
Many operators such as PartyGaming and 888.com have already been profoundly affected. In particular, PartyGaming paid the US Department of Justice $105 million in 2009 to avoid prosecution for illegally accepting online bets before it withdrew from the US in 2006. However, some industry analysts have already speculated that online gambling will continue in the US, since many transactions involving US players are coded in order to avoid detection by financial institutions.
In any case, the ban may not remain in force for long: alternative legislation which proposes regulation and taxation of online gambling has been introduced by Massachusetts Representative Barney Frank and is due to be considered this summer. Furthermore, Senator Rod Wright, leader of the Californian Senate Committee on Gambling, has proposed a bill which would license up to three California-based companies to provide online poker websites for Californian residents only. Introducing this legislation would potentially raise significant revenues for the State - at least 20% of the licensed operators' gross revenues would flow to the State and help to counter its massive budget deficit.
