UIGEA Under a Microscope

November 6, 2007

With the passing of the Unlawful Internet Gambling and Enforcement Act of 2006, or UIGEA, it became illegal for financial institutions to process payments as they pertain to the transactions involved in online gambling. The onus falls on the banks and financial companies to ensure that the processing of those payments does not get through, and that they uphold the law to its fullest extent.

However, according to the �Proposed Internet Gambling Regulation Would Require New Policies and Procedures for the U.S. Payment Systems� advisory that was just released by Alston & Bird, a national law firm, it would be very simple for people to circumvent the checks and balances and continue to participate in online gambling. They say that the banks, etc. would face huge burdens in attempting to regulate the online gambling transactions.

They say that residents can simply go around the laws and use a foreign bank account where online gambling is legal. They say that it would be extremely difficult for the banks and financial institutions to comply with the ruling, and that they are clearly setting them up for failure. They say that the banks would then have to �interpret ambiguous State and Federal gambling laws, which do not clearly differentiate between legal and illegal Internet gambling activities or transactions, and then implement unreasonable and costly solutions to achieve compliance.�

The advisory goes on to say that the worst part is that even after the banks have worked so hard to try and put in the regulations and restrictions that the government has asked for, they will still fail in their mission � which is to stop online gambling. Even the processing of actual checks would be impossible with them unable to check each individual check to see if it was written out to some online gambling company.

They state that instead of trying to put the burden for stopping online gambling on the financial industry, simply regulate and tax online gambling which would allow residents to gamble safely. It would also bring in a healthy string of revenue for the country as well. The entire report is available for viewing at www.alston.com.
 

 

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