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The Truth about the UIGEA and What It Means for Online Poker
What is the UIGEA?
UIGEA stands for “Unlawful Internet Gambling Enforcement Act.” The UIGEA is a part of the Safe Port Act of 2006. The purpose of the Safe Port Act is to strengthen security measures at American ports in consideration of the events of September 11. The UIGEA was a late amendment to this bill, and thanks to a loophole resolution was not read to the Congress prior to their vote on the entire Safe Port Act.
Fueled by the country’s high priority for improved homeland security, few Congressmen questioned any part of the bill which was passed with only two votes against in the House and unanimously in the Senate. Several Senators have since stepped forward to argue the legality or practicality of the UIGEA, and legislation has been proposed to reverse it.
The UIGEA had a huge impact on the gambling industry in America and resulted in dozens of online American poker rooms shutting down or moving their businesses to countries without such restrictive legislation. While the passing of the UIGEA was dubious and has inarguably hurt the industry, there are many misconceptions about what it actually means for online poker enthusiasts.
What can the UIGEA do?
- The UIGEA can prevent online casinos based in America from taking cash deposits. This is why many of the American poker rooms were forced to close, move, or alter their format to offer only “fun” or point-based games.
- The UIGEA can prevent financial institutions from directly transferring funds to online gambling sites. The only financial institutions this applies to are those banks, credit unions, etc that operate within the United States. Furthermore, this part of the act does not apply to third party transfer services like e-wallets or PayPal and does not specifically prohibit the use of checks.
What can’t the UIGEA do?
- The UIGEA can’t directly prohibit online gambling. The only thing it actually controls is funds transferred to be used specifically for online wagering. With some exceptions (namely horse racing and sports books in Nevada), American gaming institutions are not allowed to take bets online, but it is not illegal for Americans to place those bets. This is why so many online poker rooms still exist and continue to open internationally.
- The UIGEA cannot punish players. Be they international or American, the UIGEA has no power over the actual players and places no restrictions on betting itself. The only people that must answer to the laws set forth by the UIGEA are American gambling institutions that accept the bets or American financial institutions that aid in the transfer of money for the purpose of betting.
- The UIGEA can’t punish organizations that work outside of its jurisdiction. Many countries have contested the United States and the UIGEA’s restrictions on transferring funds. The World Trade Organization upheld their objections. Furthermore, the UIGEA has no power over funds transferred outside of American institutions. Money sent through eChecks or e-wallets is not covered by the UIGEA’s restrictions and therefore is a legal way to place bets.
How has this affected online poker players in America?
- Unfortunately the number of online gaming rooms based in America has decreased significantly since the passing of the UIGEA, and many international poker rooms will not accept American players because of the complicated process required to receive their funds.
- The good news is that some American poker rooms remain, like industry giants FullTiltPoker.com and Pokerstars.com . Both companies take American deposits through eChecks. Several international poker rooms (many that were originally based in the U.S.) also accept American players.
- While eChecks are no doubt more complicated to use than simply transferring the money directly from your bank, they are nevertheless a solid alternative for American poker enthusiasts that still want to play online. For more information on Poker Echecks, visit our designated page: Poker Instant Echecks
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