The heart of the matter in UIGEA comes in section 5363, entitled “Prohibition on acceptance of any financial instrument for unlawful Internet gambling”:
No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling…
This then goes on to list any and all possible methods of electronic and “real-life” payment of any form of money.
The problem with this part of the legislation – and the Libertarians are particularly apoplectic about this – is that essentially the financial institutions are left to police the transactions themselves! The banks are required by this law to block the transactions deemed illegal by the federal government and report them. This is a truly unprecedented bit of law in America; it’s almost as though the government wants to make “citizen’s arrests” mandatory in this sphere.
The other “gray area” – more accurately, a deliberate contradiction thanks to various sucking-up lobbying efforts – is in the previous section of the bill. “Betting” and “wagering” are defined within UIGEA as “risking something of value on the outcome of a contest, sports event, or a game subject to chance.”
This is the part that Poker Players Alliance and its ilk believe is exploitable for their cause: As it stands, thanks to a handful of legal rulings, poker has successfully avoided the “game subject to chance” description. Sort of. Because, again, UIGEA requires the financial institution to determine which transactions are coming from illegalized websites. Many banks have reportedly simply rejected all gambling-seeming transactions; if Joe Creditor at First Bank sees a transaction to “OnlinePoker.com,” do you reckon he’ll reject the transaction without too much inner debate or risk the wrath of the feds because he believes poker is a game of skill, damn it?
Ironically, despite the sops in UIGEA that the Bush Administration gave to horseracing interests, the horseracing crowd is now finding that some transactions of theirs aren’t going through as banks, made paranoid, play it safe while rejecting transactions wholesale.
Meanwhile, UIGEA also makes a laughable exception for state lotteries, stating that, while the definition of betting includes “purchasing an opportunity to win a lottery,” the matter of state lotteries is a legal question for, well, the states to define. Well and good, one supposes, but aren’t those financial institutions still required to cease taking those gambling “opportunities” technically illegal under UIGEA?
Hope this makes sense, because it doesn’t to me.
Cheers,
Os.