Online Gambling's - UIGEA

The Unlawful Internet Gambling Enforcement Act (UIGEA) is a part of the Security and Accountability For Every Port Act of 2006, or commonly known as the SAFE Port Act. The SAFE Port Act was enacted to cover online gambling and the U.S ports in relation with the continuous threat of terrorism. Title VIII of this Act has covered online gambling and is also commonly known as the Unlawful Internet Gambling Enforcement Act of 2006. This title 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. Title VIII's main objective is to prevent money laundering by terrorist organizations.

Surprise spread quickly over the online gambling industry when the UIGEA was passed by Congress in 2006. Several publicly listed members of the gambling industry took it so seriously that they ceased taking bets from American players even before having read the Statute. The UIGEA faced severe criticism both internationally and from the online gambling players community in the U.S. The international community that was critically affected by the loss of the players from the US, has pressed the matter that UIGEA has violated WTO standards. Antigua who is a major online gambling destination, has claimed $ 3.4 billion after it has obtained a ruling from WTO. Despite all the protests and criticism, the US authorities remain silent and continue to ignore the issue.

The opposition within the online gambling community is more effective. Online poker players, together, formed the coalition, Poker Players Alliance aiming to speak with one voice in order to promote poker, and to protect their rights as players. Online casino players have also organized the group Interactive Media Entertainment & Gaming Association (IMEGA) that aims to foster cooperation between the online industry and government at all levels, and to promote innovation, openness and freedom on the Internet.

The iMEGA went to court in March 2008 on behalf of a client against the UIGEA. The judge rejected the petition but acknowledged that there were deficiencies in the UIGEA that were best addressed by higher courts. The iMEGA has filed an appeal in the higher courts. The Internet gambling industry has challenged the UIGEA on several counts. The foremost is that it violates the fundamental rights of privacy, speech, expression, and conduct. Another important argument is that the UIGEA discriminates against Internet gambling as compared to land-based gambling. There are several arguments that are technical rather than fundamental. The most forceful of these is that the UIGEA does not define Internet gambling and is therefore vague. Several legislative challenges have been initiated against the UIGEA as well. The bill HR 6870 seeks suspension of the UIGEA till all issues raised against the UIGEA have been satisfactorily addressed. The bill S 3616 seeks to identify poker as a game of skill and therefore take it out of the purview of the UIGEA.

The online gambling community has come to terms with the fact that if it wants prohibition of Internet gambling removed then it will have to accept regulation. In fact many have begun to advocate regulation. In addition to the issue of money laundering regulation will address issues like underage, problem gambling and tax avoidance that will therefore increase the credibility of the online gambling industry.