Archive for January, 2009

The Unlawful Internet Gambling Enforcement Act, or UIGEA in short, is the law governing online gambling in the United States. Hastily passed by Congress in 2006, this law will take effect in 2009.

This is one of the most unclear laws that we are aware of. It seem no one understands this law, except maybe some obscure Law Professors in arcane University libraries. For example some online poker rooms have decided to withdraw from the American market such as Party Poker, while others have not, such as PokerStars, which has not suffered (yet) from doing so.

This law does not make it illegal to gamble online, but it prohibits financial institutions to send money to online gambling websites. If so, why did some poker sites leave, while other remained? So it seems that all the burden for implementing this law is on the banks, which are reluctant to act as the police for online gambling.

In addition, it is far from clear what online gambling is. The law does not specify nor does it give a list of the companies conducting it, so that the burden would be even heavier on the shoulders of the banks if they are the ones supposed to determine which online company is offering online gambling, and which is not.

Gambling legality is a state not a federal issue, making this even more complicated. For example in Hawaii and Utah, gambling is illegal, whereas in California poker is legal as it has been declared a game of skill, hence not a game of chance.

The new president Obama is a poker player himself and it is expected that UIGEA will never see the light, as it was part of the “midnight drop”, a term depicting controversial laws passed by an outgoing administration.