Friday, October 06, 2006

Online Gambling and the Unlawful Internet Gaming Enforcement Act

The Unlawful Internet Gaming Enforcement Act.
The U.S. The House of Representatives and Senate, in all likelihood savored the moment they dealt a serious blow to online gambling this weekend, by passing the Unlawful Internet Gaming Enforcement Act, which was attached to the port security bill, that makes it illegal for banks and credit-card companies to do business with online gambling companies. The bill requires the President to be sign it into law within days from now and the general consensus amongst analysts is that, its almost a certainty.

Unlike the version that passed the House earlier this year, the approved legislation does not explicitly outlaw online casinos or poker rooms but does prevent financial institutions from accepting and prohibiting gamblers from using credit cards, checks and electronic fund transfers to settle their online wagers, and does not provide clarification as to whether some forms of online gambling are permitted.


This has very negatively affected the shares on the London stock market that saw billions of pounds in stock value vanish into thin air. Among the big losers were PartyGaming, 888, World Gaming, Sportingbet and ParadisePoker.com who have stopped accepting wagers from citizens within the US. The port securities bill, will affect payment processors such as Neteller, which have assumed the role of middle-man between banks and online casinos.

This bill did NOT in effect make internet gambling illegal. What it did was affect the mechanism by which Internet gambling takes place…and there is some question as to whether or not that will be effective. The prohibition is just an incentive to drive the industry underground.

What led up to the bill being passed?
Numerous congressmen have since about 1999, made reference to a sleazy and unpopular industry, poisoning the minds and the morals of US citizens, further pointing out that online gambling businesses collect millions of dollars in untaxed revenues, and say the proposed legislation is about more than protecting citizens from the evils of gambling. This measure is purportedly to clean up a “serious problem” that exists on the Internet. However, no reference is made to the fact that the majority of internet gambling sites are, legitimate and are licensed in the country in which they reside and monitored by international gambling authorities and yet not much thought is given to the possibilities of regulation and taxation measures, as have recently been implemented in Britain, but instead a 1920’s prohibition mind set prevails amongst lawmakers in the U.S, which if further perpetuated and, if the “history repeats itself” adage rings true, will have a very similar outcome to the 1920’s prohibition. Is this just the “camel sticking its head into the tent” and will online privacy as a whole soon suffer?

It has been suggested the feds will try to use it as a springboard for greater restrictions on unpopular or controversial sites as recently proposed by U.S. Representative Bob Goodlatte. “The Internet Gambling Prohibition Act will give U.S. law enforcement agencies, the ability to force Internet service providers to remove gambling sites from their servers, or to block user access to such sites appearing on other servers.” Goodlatte goes on to say. “We have 700 illegal, out-of-control, unregulated cyber casinos online that are sucking money out of the country, Most of these virtual casinos avoid the tangled web of U.S. state and federal gambling laws by setting up shop offshore in locales such as Antigua and Romania.”

Sue Scheider, who chairs the Interactive Gaming Council was quoted saying. ”If betting online with cash becomes illegal, rogue casinos will get creative, using electronic wallets for payments, says. Because electronic wallets create online identities with debit accounts, tracing the wallet-owner's real identity is more difficult than with credit cards. She adds "It's a privacy issue".

History shows us that when one method of online funding is blocked alternatives spring up to take their place overnight. This law is just asking for an inevitable solution, whether it be the eventual legalization of online gambling due to the goverment's inability to implement or whether it be pushed underground, forcing the normal law abiding U.S citizen to become a "criminal", while in pursuit of a favorite game, hobby or recreational activity which they love, and which has been accepted by millions as a part of normal life and freedom of choice. Either way, online gambling is here to stay, irrespective of lawmakers views on the matter and irrespective their choice of solution, be it amicable and in the interest of taxation, forms of control, internet gambling operators and online gamblers alike or a deliberate attempt to make it go away.

Online Gambling is here to stay, like it or not.

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