Jan 15 2010

Is Online Gambling Legal or Illegal?

written by: John under News, Poker Law Comments: Comments Off

is online poker legalIf you are not a bank, it is legal for you to participate in the transferring of funds online and the activity of online poker. You may play, at least for the next six months…

The UIGEA’s regulations that were suppose to take effect on December 1st, 2009 have been delayed six months to June 1, 2010.

Banks had begun preparing to comply with all UIGEA regulations and poker players were looking to Barney Frank with watchful expectancy. Although the Chairman of the House Financial Services Committee is not a gambler himself, he believes the government should not tell its citizens how they should spend their money. Early in December, 2009, Representative Frank and the PPA (Poker Players Alliance), the leading poker grassroots advocacy group with more than one million members nationwide, were successful in getting Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben S. Bernake to postpone the deadline and give them the necessary time for more research into online gaming. It is with hope that the federal government will move to explicitly legalize and regulate the game. The new bill would create an exemption to the Unlawful Internet Gambling Enforcement Act for operators that are licensed and regulated.

This is a big win for poker, but an even greater victory for advocates of good and fair public policy. In the months to come, legislators will be able to interpret UIGEA and pass legislation and regulate poker in the year 2010. There is concern, though, about unclear language contained in the UIGEA and the resulting doubts of enforcing the law by banks and gambling communities. Several banks and financial service groups have expressed their support for a better written law which will enable them to comply with the Federal Reserve and Department of Treasury.

UIGEA, which was enacted in 2006, restricts the use of the payments system for Americans who seek the freedom to gamble online. It was rushed through Congress as an addendum to the Safe Port Act.


President Obama wants to bring change, whether it is health care reform or economic incentives. He has not yet disclosed his stance on online gambling, clearly anyway, but he surely is in favor of working with the EU (European Union) and the United Nations on the matter of online gambling legalization

The EU emphasizes the fact that the UIGEA of 2006 grossly violates the regulations of the European Union in terms of trade agreements. The EU is concerned that the UIGEA devastated European Internet gambling companies that are legally registered outside the US. According to industry experts, the Bush administration ignored the entire allegation but the Obama administration is giving importance to the matter. It will now be up to President Obama to try and be the peacemaker he has made himself out to be.

In a study conducted by Merrill Lynch, it was reported that the Internet gambling industry will hit its peak around the year 2015. At that time it is predicted that the market will bring in $528 billion worldwide. One of the representatives of Merrill Lynch has said that regulation of online gambling will ultimately be implemented in place of prohibition, and that it is only a matter of time.

Gambling industry experts believe that legalization, as well as regulation, will lead to a great inflow of tax revenues. The Joint Committee on Taxation reveals that the federal government could gain a $42 billion windfall over the next decade by taxing online gambling sites. The money that the US government will gain will in turn help the sagging economy and perhaps help us to climb out of this recession.

John Pappas, Executive Director of the Poker Players Alliance says, “Licensing and regulation is the most protective measure we can take to ensure the online community can be properly monitored while maintaining our Internet freedom.” PPA members have been contacting and continue to contact their members of Congress via phone, email, and visits to urge clarification of the UIGEA regulations. Over 300,000 letters alone have been sent to members of Congress by PPA members. The PPA is looking forward to working with regulators and legislators to pass laws that protect consumers and the great game of poker.

Representative Barney Frank is feeling confident and continues to gather support in repealing the UIGEA for the time being. It all boils down to the waiting game, which seems to be a common occurence when the US government is involved.

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