The UIGEA and its effects
On a careful study of the UIGEA I have come to the conclusion that it is a very cleverly planned act, and very effective in its objective which supposedly is to wipe out internet gambling in the United States. Strangely however the US government seems to be ignoring its forty states that currently offer various types of lotteries. Perhaps one factor to be duly noted is that the U.S government makes a lot of money from these state lotteries.
It does not however make money from online gaming because most of the web casinos American players interact with are based offshore.
Overall this seems to be a rather hypocritical approach and we all wonder why the government cannot just tax internet gaming and make everyone happy.
The Unlawful Internet Gambling Enforcement Act has brought about some serious changes within the few months of it being instituted. The UIGEA has caused severe set backs in the gaming industry cutting down on profit for many online casino websites and preventing US players from transacting with these sites and enjoying some real gaming action.
The results could have been seen the very next day when 6.5 billion was erased from the value of online gambling shares immediately after the U.S. Congress passed the Unlawful Internet Gambling Enforcement Act that banned Internet gaming.
Since the UIGEA, PartyPoker.com, one of the largest poker sites on the internet, exited the market. This would have caused a drastic drop in the online company’s financial standing as 78 percent of revenue earned by the United Kingdom-based gambling organization PartyGaming Plc came from the U.S. customers transacting with the website PartyPoker.com.
The UIGEA prevents financial institutions in the U.S such as banks and credit card firms from transacting in regards to fund transfers with any of the Internet-based casinos located offshore. Since then, the American gaming public has been rejected from various online casinos that have yielded to the pressure of U.S congress laws. According to these laws any “person engaged in the business of betting or wagering” deliberately transacting with online web casino companies is guilty of “unlawful Internet gambling” and is liable to face fines or even a 5 year imprisonment. This bill also forbids financial institutions from sending money to intermediaries such as online payment companies.
The founders of NETeller, one of the largest online payment companies in existence today, faced criminal indictments brought against it by the US Department of Justice.
However this act had 270 days during which guidelines and regulations for enforcement of the act should have been drawn. This period ended on the 20th of July, 2007 without anything being drawn up. There have been many an effort to have the game of poker excluded from the act. There is also a serious program that is ensuing where those against the act are trying their best to get it repealed. Like alchohol prohibition, it probably will be repealed in the end.