On June 1st, it seems inevitable that banks will have to be in compliance with the Unlawful Internet Gambling Enforcement Act (UIGEA); the vague and feckless regulation that seeks to prohibit internet gambling by leaving banks and credit processing services no choice but to refuse to handle money that could in any way be connected with gambling online.
The lead opponent of the regulation, Barney Frank, (the man responsible for the delay of implementation and compliance dates thus far) reported that treasury Treasury Secretary Timothy Geithner had struck a deal with Arizona republican Senator Jon Kyl that there would be no more delays for UIGEA if Kyl would end his blockage of treasury nominations–which he did in February. Therefore, it is safe to assume that, come June 1st, UIGEA will be in full swing. So, what does this mean for poker players online? In short, it means that “gambling” online will have a whole new meaning in that, the creative new ways they find to play for money online will hold a host of hidden dangers. A few alternative methods gamblers are beginning to turn to include:
E-wallets: online credit processing such as E-WalletXpress, EcoCard, and NetCents that allow customers to fill an online account with money to be used on other sites. While this is an effective way to make deposits with online casinos, withdrawing funds can become complicated. Many digital wallets have limits and fees on withdrawing activities and are not FDIC insured.
Prepaid cards: function much like credit cards. Withdrawing funds would most likely require gamers to have online casinos issue check or a wire transfer.
Gift cards: associated with credit card companies like MasterCard and visa, UIGEA does apply to these cards and some evenly explicitly express the fact that they are not to be used in association with online gambling, yet, many Internet gamblers have continued to successfully use them in order to deposit and withdrawal funds related to online gaming.
Most of these methods have fees associated with them, are not FDIC insured, and have no guarantee that funds will be payed out. Unlike major credit card companies, there are more risks associated with using non-standard credit processing methods. As the department of justice crack down on the various methods that consumers will no doubt find to continue engaging in online gambling, these consumers will be forced farther and farther into the shadow where there are fewer protections and more opportunity for scams. This is one major problem with UIGEA that I and other proponents of freedom have noted: making the activity illegal doesn’t protect consumers and doesn’t stop them from gambling–it simply hides the activity and removes any legal recourse they might have when others act unlawfully. This is an instance of government doing exactly the opposite of the legitimate function of government. Rather than leaving citizens free to choose their own course of action and protecting them in the event of criminal or fraudulent acts, government is preventing the freedom of choice and leaving them high and dry when their rights are violated.
Regardless of what happens with Jim McDermott’s taxation legislation UIGEA needs to be repealed. Internet gambling should be legal not because some legislation makes it so, but simply because it is not the place of government to ban individuals from engaging in voluntary activities that do not infringe on the rights of others.
Note: UIGEA does not make the act of gambling online illegal, it simply makes it illegal for any credit processing service to deal with funds associated with “unlawful” internet gambling. Because the UIGEA neglects to define which online gambling activities are unlawful, most legitimate credit processing companies will choose to deny any and all transactions having anything to do with gambling (for example MasterCard has already begun blocking gambling-related transactions).
Though it appears that the House Ways and Means committee will hold a hearing this month on Rep. Jim McDermott’s legislation to legalize and tax Internet gambling, the effects of UIGEA have long been felt in the online gambling community–with various casinos refusing US-based players, credit card companies blocking transactions, and now the department of justice is using the regulation to prop up its despicable persecution of American citizens engaging in voluntary behavior that it doesn’t approve of.