Adopted in 2006 amid dreams of thwarting underage gambling and plugging up a leak in Uncle Sam’s pockets, the UIGEA has had almost 2 full years to prove its worth, which indeed it did. Underage gambling is as rampant as ever, and instead of saving money, the piece of legislation often billed as being one of the “worst written sections of the US Code”, has punched several new holes into the federal budget.
If you’re thinking about the money the US had to pay as damages to Antigua, forget about it. That’s small change compared to what it’ll cost to turn the banking industry into a law-enforcement agency – something that the UIGEA requires (although it doesn’t go into specifics on the matter to make things more “interesting” for those concerned). Another huge failure that can also be jotted up to the UIGEA is that it has essentially made online gambling more of a hazard for those still playing (and believe me there are plenty of US players still involved).
By scaring online gambling companies off, and by confining them to the Caribbean to Gibraltar or to Malta, the UIGEA has effectively made it impossible for US players to seek damages or justice in any shape or form in case they get sucked into a scam. Take the latest online poker cheating scandal for instance. Ultimate Bet has dragged on the investigation it launched into alleged super-user accounts for 6 months now, with no likely conclusion in sight. They may as well sweep the whole thing under the rug (I’m not sure that’s not exactly what they’re attempting to do) and there would be no authority that could effectively intervene to hold them responsible.
With all the problems that the UIGEA is causing (for the banking industry, for players, for the budget, for the online gambling industry) and the limited or non existent benefits it provides, the pressure is slowly but surely mounting towards having it either repealed altogether, or altered to a less radical version.
After the Main Event of the 2008 WSOP began with a speech on how opposition to the bill is growing within the Congress, the UIGEA has been the target of a steady flow of bigger and smaller jabs.
California lawmakers decided they may want to have online poker legalized on an intra-state level in order to secure a revenue stream and to make it once again safe for local players to belly up to virtual poker tables. While the bill they’re pushing is not a direct attack against the UIGEA (it is merely trying to set up a local legal framework – fully compliant with the UIGEA) other initiatives have been much bolder.
Congressman James McDermott introduced a bill recently which seeks to turn online gambling and poker into a source of revenue for the federal budget. It sets the amount which can be potentially acquired this way to $8- 42 billion, money which would be spent on foster-program participants and on the reeducation of the workforce which is the hardest hit by the unfavorable economic conditions.
The latest addition to the list would be the talks that EU trade officials are seeking to initiate with their US counterparts on the matter. Because the EU feels it’s been unfairly knocked out of a market it had a pretty big share of, and that the UIGEA blatantly disregards the WTO’s GATS agreement, it wants to send Commissioner Peter Mandelson to demand justifications and to defend its interests in the US gambling market.
While no breakthrough is expected of the talks set to begin at the end of the month, the Europeans have clearly made it a possibility that sanctions against the US banking industry will be implemented if no agreement is reached.
Placing additional burdens on a sector already in distress (over the implementation of the restrictions set forth by the UIGEA) will certainly have at least unpleasant consequences.
The bottom line is, as more and more interests queue up behind those opposing the UIGEA, and as more and more funds pile up on their behalf, the most ambiguous and difficult to decipher gambling law ever to be passed in the US is looking increasingly shaky.
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