What Is Uigea?

What Is Uigea?

Posted on 30/06/10 - by Theodor Mavrodis

The Unlawful Internet Gambling Enforcement Act of 2006, more commonly known as the UIGEA, prohibits the transfer of funds from a financial institution to an off-shore Internet gambling site.

 

UIGEA is part of The Security and Accountability for Every Port Act of 2006, or more commonly known as the SAFE Port Act.

Former president George W. Bush signed it into law on October 13, 2006. Almost immediately, publicly held online gaming sites stopped taking American players. The Act effectively ended online gaming in the United States.

But only for a short period of time.

Due to the many loopholes and contradictions in this law, a player can still send a check or money order to the sites if he chooses us online casinos.  

There is also a growing effort, led by Congressman Barney Frank, to overturn the Act and restore the choice of whether or not to use those sites to the people.

Background and Politics

The Act is designed to increase security at our nations ports and to end the use of financial institutions to transfer funds to an online gambling site. It basically ends individuals' ability to use a credit card, in most cases, to pay for their online gambling.

People can still send a check or money order, but he Act has increased tensions between the United States and countries where online sites are situated.

Antigua, for instance, states that the Act is a violation of its treaty obligations by not granting full market access to online gambling sites based in Antigua.

On January 25th 2007, the World Trade Organization ruled that the US was in fact in violation of the treaty.

Reactions to the UIGEA

There has been a lot of backlash from the Act. Antigua has filed a claim for $3.4 billion dollars in trade sanctions against the United States for not granting full market access to online gambling companies based in Antigua.

The World Trade Organization sided with Antigua and the US settled out of court.

Even the European Union has something to say about it since many online gambling houses are based there. The exact details of these settlements are often not available to the public with the White House citing "national security" in regards to the subject.

Is There a Future for Online Casino Gambling in the U.S.?

The future of online casino gambling in the U.S. is unknown for several reasons. Until the courts reach a clear decision concerning the UIGEA lawsuits, no one can be sure that the government will even continue to interfere with online casinos.

It seems likely that if the act does not survive the lawsuits, then the U.S. government will seek other ways to regulate the industry. This does not necessarily mean the end of USA online casinos, but it could mean paying taxes on money won through the sites.

This would be a welcome compromise for the players, casinos and legislators.