What is the UIGEA?

The Unlawful Internet Gambling Enforcement Act of 2006, usually labeled as “infamous,” has had a terrible impact on the US online gambling industry. Recently, on April 15, 2011, the US federal government used it to crack down upon four prominent online poker service providers—Absolute Poker, Full Tilt Poker, UB.com, and PokerStars, seizing their domain names and indicting 11 persons of unlawful gambling, bank fraud, and money laundering. As a result, PokerStars and Full Tilt Poker withdrew their services from the US market and UB.com and Absolute Poker stated that US players will no longer be able to deposit and withdraw funds.

Ever since the passage of the UIGEA, the number of online gamblers in the US has reduced. Party Poker was the first to withdraw its services from the US market, and it was followed by a number of online payment processors. Most of the best online gaming sites do not permit US players, and those that do, do not permit them to play for real money. Gaming sites have suffered intensely because blocking US players means loss of a large slice of player traffic. Fortunately, there are still a number of online poker, online bingo, online sports betting, and online casino gaming sites that allow US players.

The UIGEA, which was passed at the end of 2006, is actually a part of the Security and Accountability for Every Port Act of 2006, to which it is hardly related. While the UIGEA does not criminalize the act of online gaming, it makes it illegal for banks and other financial bodies transfer funds related to online gambling, unless these funds are connected to online lotteries, fantasy sports, and horse racing. Although the Senate never discussed the UIGEA, it became law, with the House passing it on July 11, 2006.

In fact, anti gambling forces in the US have been trying to get this bill passed in the House for a long, long time. Finally, the bill was attached to the Safe Port Act, which has nothing to do with gambling, but is concerned with protecting the ports of US. Since no politician could oppose a bill that was beneficial to US security, representatives who were against gambling thought that it was a good idea to attach the UIGEA to the Safe Port Act. The plan worked and the UIGEA became law, making life miserable for US gambling enthusiasts as well as online gaming service providers.

Many US citizens are under the mistaken impression that the UIGEA criminalizes online gambling. However, the UIGEA is quite unclear on the subject of online gambling itself, owing to which it has been one of the most ineffective pieces of legislation in the US. Being vague and unclear, it hardly succeeded in preventing US players from gambling online. Smart players and gaming sites found several ways to dodge this law; and in spite of the recent federal crackdown, US poker players did not stop playing online poker. They just moved from Full Tilt and PokerStars to Carbon Poker, Bodog Poker and others.