One Month of the UIGEA
July 7, 2010 (CAP News Wire) – It was postponed several times and the subject of a desperate reversal campaign, but eventually, America’s anti-online gambling law, the UIGEA (the Unlawful Internet Gambling Enforcement Act of 2006) went into full effect on June 1.
So — has the much-feared law had any effect on the online gambling and/or Internet poker industry in the United States?
“I think we’ve seen very little impact on the ability of Americans to play poker on the Internet,” John Pappas, executive director for the Poker Players Alliance (PPA), told PokerNews.com. “For many Internet poker sites and players, the ill effects of the UIGEA were felt several months ago if not several years. Most sites migrated to other responsible payment systems and the players migrated to that as well.”
True enough — Microgaming announced a pull-out of the U.S. market in 2008, to avoid any possible legal issues. (Although reports exist that not all Microgaming sites have left the American market.) And prosecutions of executives for companies PartyGaming and BetonSports have already taken place (though some of those are also for the Wire Act, which also forbids online gambling in the U.S.)
There have been other effects on players, though. “Many online gambling sites have, since June 1st, raised the minimum deposit allowed into their services,” claims Glen Farmer at USAPlayers.com. “While those making middling to high deposits will not have to be concerned with this change, low stakes players, those looking for the entertainment rather than the gamble, have been the primary level of player to be impacted by this change.”
“[W]e’ve seen some impact from the regulations that were implemented on June 1st,” adds Teddy Covers at SportsMemo.com. “Certain forms of previously accepted payments were getting rejected by online gamers. Specifically, prepaid and reloadable gift cards are now being declined, and some credit cards which worked before are no longer working for online deposits. But that’s about it.”
So, inconvenience to players seems minor — but does exist. Have online casino and Internet poker affiliates felt any effects? Per the member forum at the CasinoAffiliatePrograms.com website — comprising more than 10,000 affiliate and iGaming industry members — not really.
One or two affiliates reported big drops in the early days of June; others have reported no changes. And nobody has reported any problems since June 10. Still, summer is usually somewhat slower time of year, so it’s hard to say for sure what’s happened. But the bottom line is that catastrophe seems not to have struck.
That doesn’t mean the law isn’t causing problems, though — some of them quite unexpected. Even though the law was written to exempt online horse racing betting (legal in some states), the payment processors charged with enforcing the UIGEA are balking at some online horse race betting, such as the situation currently unfolding in New York. (CalvinAyre.com helpfully points out that this may be to remind lawmakers that “that offloading the entire responsibility onto financial firms can have unintended and undesirable consequences”.)
Either way, the UIGEA has faced much criticism throughout the media, even outside of the Internet gambling industry. “There are glaring problems with the UIGEA as soon as one reads it,” writes Julian Switala at MNDaily.com. “Although the act prohibits transferring funds to an unlawful Internet gambling site, it also provides exemptions to state lotteries, horseracing and fantasy sports. These exceptions, with no explanation for why they exist, are arbitrary.”