The Unlawful Internet Gambling Enforcement Act (UIGEA) is a part of the wider The Security and Accountability For Every Port Act of 2006 (SAFE Port Act). The SAFE Port Act was enacted to improve the security at U.S. ports especially in connections with the treat of terrorism in the post 9/11 scenario. Title VIII of the SAFE Port Act is known as the UIGEA. UIGEA essentially prohibits the transfer of funds from a financial institution to an Internet gambling site mainly with the objective of preventing money laundering by terrorist organizations.

The UIGEA evoked instantaneous response in the Internet gambling industry. Most Internet casinos and poker rooms stopped taking U.S. players and stocks of listed Internet gaming companies fell drastically on bourses. The UIGEA faced severe criticism from both the international community and from the Internet player’s community within the United States. The international community that was severely affected by the loss of U.S. players claimed that the UIGEA violated the World Trade Organization (WTO) norms. Antigua, a major Internet gambling jurisdiction, obtained a ruling from the WTO to this effect and has claimed $3.4 billion in compensation. The European Union has also initiated proceedings against the United States in this connection. However none of this has had any effect and the United States authorities are stalling or ignoring the issue.

The opposition from within is more effective. The Internet poker players have formed the Poker Players Alliance (PPA) and the Internet casino players have formed the Interactive Media Entertainment & Gaming Association (iMEGA) who are actively pursuing every avenue at their disposal. 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 Internet 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 and problem gambling and tax avoidance and therefore will increase the credibility of Internet gambling.

Additional Resources:

• Another great site we suggest here checking out and reading online casino related news and articles are at Casino Advisor. We found a very complete and detailed article about the UIGEA there. Read the UIGEA article at CasinoAdvisor.com
  
  
• Wikepedia also offers more details on the subject of the Unlawful Gaming Act which can be found here.
  

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