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New Theory about U.S. Online Gambling Plan as UIGEA Looms

April 27, 2010 (CAP Newswire) – Now just five weeks away from the full implementation of the United States’ Unlawful Internet Gambling Enforcement Act (UIGEA), and the media is (for once) starting to focus on this issue. (Most recently, the Miami Herald stated that he prospect of legalizing online gambling is potentially a “win-win”.) 

Still, most interested parties agree that it’s unlikely that the UIGEA will be delayed at this point, despite the seemingly best efforts of legislators like Barney Frank and Raymond Lesniak to do so.

The American Bankers Association, the group that would basically be charged with enforcing the UIGEA, isn’t thrilled with it, either. The Medill News Service reports that, according to Steve Kenneally, the Vice President of the American Bankers Association, “the banks are confident they can enforce the law, but say it will take time to implement changes, and that some transactions will be able to slip through the cracks …” but “banks will incur extra costs associated with their new responsibilities, and that ambiguities in the law make determining what is actually an ‘unlawful transaction’ challenging.”

So, with powerful bankers and legislators agreeing that online gambling taxes would be a big help (and the big media play of last week’s story that billions could be made that way), and with the Republicans out of power, what exactly is the hold-up, here? Why is the UIGEA still slated to go into effect on June 1? puts forth an interesting theory, which ties in the possible involvement of Senate Majority Leader Harry Reid and the U.S. government’s current investigation of Full Tilt Poker, the world’s largest online poker room that allows U.S. players. The site speculates that it may not be that the U.S. doesn’t want online gambling legalized — but it wants to have it legalized in the best possible way to benefit American companies. To wit:

“1. Let the UIGEA go into full effect June 1.
“2. Eliminate the most powerful online poker operators currently in the industry (i.e. Tilt and Stars).
“3. Pass a new law.
“4. Let Harrah’s, the Sands, and MGM/Mirage set up shop.
“5. Then let the European poker sites join the party.”

It’s certainly a plausible theory, although maybe a bit conspiracy-slanted. Still, with the U.S. the only major nation that explicitly does not allow online gambling, it can perhaps be agreed that something is up.

Even India, which doesn’t allow any sort of betting legally, doesn’t expressly forbid its citizens from betting on overseas sites, like the U.S. does. “The only country to have made online gambling illegal for its citizens is the US,” states the Economic Times of India. India doesn’t legally allow betting, but it also doesn’t forbid its citizens from gambling on overseas sites, as the U.S. does. In that light, maybe a conspiracy theory doesn’t sound so far-fetched, after all.