While the US passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, it hasn’t stopped Americans from participating in online gambling, even though it outlawed internet gambling and restricted the ability of financial institutions to pay online gambling sites. Specifically, the UIGEA places restrictions on credit card companies and banks from transferring money for gambling.
The answer of the international internet gambling community to the law was to require online bettors to set up e-wallets as online deposit accounts. The e-wallets draft money from credit cards, debit cards, and bank accounts, and then route them to merchants that include gambling sites. Since many e-wallet programs are not based in the US, the money spent on internet gambling is taken outside of the US and therefore outside of US regulation.
So, basically, the UIGEA was not that effective, because people who wanted to gamble found ways to do so. After the UIGEA was signed into law, internet gambling sites moved out of the US and set up at offshore sites where online gambling isn’t regulated.
Because of the global financial meltdown that began in 2008, Congress is seriously rethinking the UIGEA, because if internet gambling were legalized in the US, it could be regulated and could be a huge source of tax revenue – to the tune of $42 billion by the year 2020! While many congressional representatives have moral objections to gambling in whatever form, most of them admit that the UIGEA is not going to stop Americans from gambling online.
The political tide seems to be turning in favor of legalizing online gambling in the US, and legislation to that effect has made it out of the committee level in the House of Representatives. However, as of late 2010, it is anyone’s guess as to when the legislation could make it to a floor vote. Congressional elections in November 2010 tend to make representatives shy away from any legislation that is perceived as controversial, so it is unlikely that anything will happen with the legislation until a new Congress is seated in 2011.
However, one group taking advantage of the slow pace of the US government is the tribal casino industry. In September 2010 Cake Gaming and Atlantis Internet Group signed an agreement to establish a network for online poker for players in tribal casinos in the US. This would represent the first officially legal online poker network in the US that offers multiple player internet poker across state lines for money. At least 30 states connect with the Tribal Gaming Network, allowing Tribal casinos to offer online poker. It is legal under the UIGEA due to Native jurisdictions’ special legal status.
Some states are considering online intrastate gambling, but the pace of legislation is slow in those states as well, particularly during an election year. The tribal casinos have set themselves up to profit well from the indecisiveness of state and federal legislators, knowing that there are potentially hundreds of thousands of poker players wanting a legal alternative to offshore internet casinos.