What´s UIGEA Doing Back in the News?
Over the next few days, a few UIGEA-related headlines will start to appear in the poker press; but there is no need for players to be concerned.
Back in 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) changed the landscape for online poker in the USA. Often misinterpreted as making online casinos and poker sites illegal, what UIGEA actually did was ban financial transactions that supported gambling activities prohibited by the 1961 Wire Act.
In 2011, the Department of Justice confirmed that UIGEA only applied to the gambling activities specifically mentioned in the 1961 Wire Act – sports betting – and that all other forms of online gambling were legal where allowed by the state. Subsequently online poker was regulated in New Jersey, Delaware and Nevada.
The Consequences of UIGEA
With so many carve-outs in the language of UIGEA for horse racing, lotteries and fantasy sports, there was a great deal of confusion about what payments could and could not be processed. US banks practically stopped payments to online gambling sites overnight, but several E-wallets stuck around for a short while until the founders of Neteller got arrested in early 2007.
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Party Poker pulled out of the US market, and the void left behind was filled by PokerStars and Full Tilt Poker – who found creative ways to circumnavigate the ban on payment processing. Four years later and the two companies were shut down by the Feds on “Black Friday”. Despite never being convicted of any wrong-doing, PokerStars was tainted with the tag of being a “bad actor.
So, What´s Happening Now?
Later today, the Board of Governors of the Federal Reserve System and the Department of the Treasury will be releasing a “request for comment”. We have already seen this request mis-reported as first stage in the joint agencies intent to renew UIGEA in its entirety; but having read the request and the sections of UIGEA that it relates to, we can confirm that there is nothing planned that will affect players´ ability to deposit and withdraw funds at [geolink href=”https://www.usafriendlypokersites.com/”]USA Friendly Poker Sites[/geolink].
What the request is actually asking for is comments from the public and other Federal agencies about measures that can be taken to reduce reporting requirements and how the information that is collected can be presented in a clearer manner. The Federal Reserve and Treasury are also seeking comments on how the collection of information can be automated to reduce the burden on payment processing companies.
Poker Players Will Notice No Difference
Although any changes to the reporting systems that are introduced in the future may affect payment processors, there is little chance that players will notice any difference. Most online gambling transactions at USA-friendly poker sites actually take place outside of the USA or are not ostensibly gambling transactions (ever sent a Western Union transfer to “Conchita in Costa Rica?”).
In fact, the situation for online gamblers in the USA is gradually getting better. The number of payment processors that are prepared to allow transactions to and from online poker sites reveals a growth. Although the wait for a check to arrive in the mail may still be with us for a few years yet, the impact of UIGEA is slowly declining and is likely to continue declining as more states introduce legislation to regulate online poker in the US.