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UIGEA (Unlawful Internet Gambling Enforcement Act)
What does it mean to conduct Unlawful Internet Gambling?
Unlawful Internet gambling is defined as placing, receiving or transmitting a bet by means of the Internet; but only if that bet is unlawful under any other federal or state law applicable in the place where the bet is initiated, received or otherwise made.
This new law, therefore, only applies to online gambling operators who violate other existing state or federal anti-gambling laws. Some conclude that since there are only a handful of states that expressly ban Internet gambling, this law has not accomplished very much.
Another way of looking at it is that all of the online gambling sportsbooks, casinos and cardrooms violate existing anti-gambling laws of every one of the fifty states. This is because: The gambling is legally deemed to take place simultaneously at both ends of the Internet connection. Under applicable state laws these interactive online gambling Websites are deemed to be doing business in the states in which the players are located when they make a bet.
This means, even if these operators are not physically based in the US, it can bee seen as just this. This in turn would mean they are operating in the US without being regulated (due to the new law they would not get a license for the US anyways). If you look at it this way, it can be argued that they are breaking the general anti-gambling law of every state, which criminalize the operation of unlicensed gambling like the sportsbooks, casinos and cardrooms that are covered by the new law - even if they are licensed under another government, such as Gibraltar or Antigua. Thus, this professional form of unlicensed gambling appears to be illegal whether or not the state has adopted a specific Internet anti-gambling law.
But as mentioned earlier, this new gambling act leaves so much room for interpretation so that different gambling operators take different approaches to interpreting this law.
Gambling in the US
Gambling online for money is legal in the United States in the majority of states (click Here for more information), with some restrictions on sports betting. People who fall victim to fraud in online gambling operations are not lawbreakers. Internet gambling does not break any federal law and only a few states expressly ban it for state residents. There are three federal laws that regulate Internet gambling.
- The Interstate Wire Act of 1961, often refered to as the Federal Wire Act, is a United States federal law prohibiting the operation of certain types of betting businesses in the USA. The law has been interpreted by some, including the Department of Justice, to mean that all online gambling is unlawful. However, the U.S. Fifth Circuit Court of Appeals has ruled that the Wire Act applies only to sports betting and not other types of online gambling. The Wire Act limits interstate transmission of sporting results for the purpose of betting.
- The Professional and Amateur Sports Protection Act (PASPA) prohobits certain states to legalize sports gambling.
- The Unlawful Internet Gambling Enforcement Act (UIGEA) does not directly restrict gambling but instead appoints banks, credit unions, and credit card companies to block illegal online gaming transactions.
Neither of these laws bar individuals from placing non-sports bets online. While the UIEGA makes it illegal for banks and other credit processing companies to transfer money related to unlawful Internet wagering, it does not explicitly prohibit online gambling as such. However, UIGEA's ambiguity creates a de facto ban on Internet wagering in the United States by making it prohibitively risky and expensive for credit processing agencies to determine what types of funds they can handle under the new law. Just to be on the safe side and to avoid possible fines or investigations, credit processing companies would simply refuse to handle any funds that could potentially be linked to unlawful gambling.
