How Does Intrastate Online Gambling Work with the UIGEA?

April 11, 2009

There are a few states that are now looking to bring in online gambling, but within their own states. By offering intrastate online gambling, they are not allegedly breaking the law. However, they are now facing the idea of the Unlawful Internet Gambling Enforcement Act, or UIGEA, and many are curious as to how the one will work with the other.

With the government saying that all online gambling payment processing is illegal, how will the banks know what is an out of state online gambling transaction and what is a legal in state transaction? This is the question that is being posed to many of the states right now as they try and figure out the answer to that problem.

The UIGEA does not include intrastate online gambling, it is very clear in that matter. But it still creates a problem for the banks when trying to determine which online gambling transactions should be kicked back and which ones allowed through. With intrastate online gambling looking like it will undoubtedly be passed before interstate and international online gambling is allowed, there is potential for a real mess ahead of those states such as California, Florida, New York, etc. who are looking into allowing it in their neck of the woods.

Vermont and North Dakota have already seen the damage that the UIGEA can wreak on their sales � and have seen the fallout from credit card sales that have been rejected because they were classified as online gambling transactions. Because the terms of the UIGEA are so vague, the implementation of those terms for the banks is hard to process and even more difficult to understand.

Before online gambling can be made legal within the individual states, they are going to have to change the way that the UIGEA perceives them. Either that or they are going to have to wait for the UIGEA to be overturned.




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