Unlawful Internet Gambling Enforcement Act (UIGEA)

Unlawful Internet Gambling Enforcement Act (UIGEA)

What is the Unlawful Internet Gambling Enforcement Act (UIGEA)? The UIGEA traces back to the 2006 Security and Accountability for Every Port Act (SAFE Port Act, Pub.L. 109-347[1]), an Act of the U.S. Congress in that covers port security and online gambling. However, there is really no patent connection between the UIGEA and the rest of the SAFE Port Act, and it is doubtful most of the voting Congress was even aware of the UIGEA’s inclusion in the Act when they voted it into law.

Explain this thing

So what is it really? The Act prohibits the transfer of funds from a financial institution to an Internet gambling site, with the notable exceptions of fantasy sports, online lotteries, and horse/harness racing. According to the website RepealTheUIGEA.org, "the law (surreptitiously passed with the Safe Port Act) is intended to eradicate online gambling by prohibiting US banks and credit card companies from transferring funds between Internet-based casino web site operators located offshore and their American-based gambling enthusiasts."

So it’s a gambling ban?

No. The UIGEA doesn’t ban online gambling – that is, its language in no way disallows online gambling for individuals. What is judged illegal by the Act is the transfer of funds from gamblers to online casinos, and vice versa, by banks, credit card companies, and payment processors.

Enforcement

The fact is that the UIGEA is feebly enforced and shrouded in ever-deepening layers of ambiguity for those charged with its enforcement - the financial institutions. Banks can choose one of two approaches; they can block all transactions which resemble gambling in any way, or they must pick and choose among proposed transactions in an inconsistent manner, inevitably inciting disgruntlement and a loss of profits, and pushing business underground to use offshore payment processors. The net result is of course that we are sending billions of dollars outside the country. Despite the ambiguity and profit loss however, online casinos and internet gambling continue to develop into billion-dollar industries.