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***GambLux EDITOR ARTICLES*** |
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What's illegal under the Unlawful Gambling Enforcement Act of 2006
[Monday, October 23, 2006]
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Anyone who follows the news at online casino sites knows all about the US's Unlawful Internet Gambling Enforcement Act (UIGEA) and how it has already affected the world of online gaming. However few people are aware of the details in the new law or how it relates to them personally. Most importantly, many online casino gamers are confused as to how this bill was rushed through Congress in the dark of night.
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First of all the law was passed through the US Congress in the final minutes before an election period recess. Senator Frank R. Lautenberg (D-NJ) told sources that no one from the Senate House Conference Committee had a chance to see the final language of the bill before it was passed. If it is a good law, why slip it by in the dead of night rather than in the cold light of day? What angers the pro-online casino community the most is the way in which the bill was 'paper-clipped' to an important bill - the Safe Port Act, HR 2954. What relation Safe Ports have to do with Online Gaming is anyone's guess. The bill which was passed through the Senate can be found on pages 213-244 of the Conference Report at www.saveonlinegaming.com/hr49543.pdf. The bill is related to the first drafts, but it does contain a few integral differences.
The law starts out with an analysis of Congress's findings on online casino gaming. These findings include a recommendation from the National Gambling Impact Study Commission. This commission was quickly discredited. Its study concluded that online casino gaming are a growing problem for banks and credit card companies, the very same companies that will be the most affected by the law. However these very same financial institutions that need saving from online casinos will now be forced to spend billions in developing new software to enforce the law. Statements from many financial institutions claim that a) the new law is an unbearable burden on the financial services industry, and b) for now the law is entirely unenforceable, even with the threat of heavy fines from the government.
The law also repeatedly states a claim that it cannot be used to change any other law or compact made with Native American tribes (who run their own gambling operations). Therefore the law cannot be used to affect local gambling laws in the United States. Gambling in a bricks-and-mortar casino is fine, but doing the same in an online casino (however well regulated) is illegal? Is this Alice in Wonderland logic, or what??
The law defines betting and wagering as "risking something of value on the outcome of a contest, sports event, or a game subject to chance." The last part, about a "game subject to chance" was designed to disallow internet poker along with other online casino games. This has outraged the online poker community, who sees poker as a game of skill and not a game of chance. Further confusing the issue, the law states that betting involves 'purchasing an opportunity to win'. Buying a Lotto ticket is also 'purchasing an opportunity to win', but national lotteries are kosher in the States.
Overseas betting companies argue that after the financial transactions take place, the money is no longer held in the US, and therefore no betting takes place within US borders. This argument is eliminated by the UIGEA's definition of 'betting which includes instruction or information'. Hello USA Congress members! Did you know that instruction manuals for making bombs can be freely purchased online in the United States, but poker players can no longer pay for online tutorials offered by poker-playing professionals.
While the UIGEA law does not immediately implicate online players, it does define (vaguely) who is eliminated from participating in financial transfers between US customers and online casinos. The law coins the new term of "Designated payment system," and "Financial transaction provider," both of which have been regulated. These terms, while vague, do cover every form of possible transaction, including third party providers such as Neteller and Firepay with the phrase, "operator of a terminal at which an electronic fund transfer may be initiated."
The fact remains, however, that the state of Nevada is still permitted to set up Intrastate gambling systems, and Native American Tribes are permitted to set up Internet gambling systems with another tribe. Congress managed to allow at-home horse racing bets, but dog racing is not permissible, and tribes can set up Internet gaming that crosses state lines. And the real question still exists; if Congress finds these online gaming systems permissible, then what exactly are they fighting against?
God Bless the Americans and their straight-laced Puritanism!!
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