UIGEA Deployment On The Way
November 13, 2021
After accepting comments from Senators, Banking representatives, "gambling-related industries," and about 125 consumers, the Department of the Treasury and the Federal Reserve Board announced their finalized implementation plan for the Unlawful Internet Gambling Enforcement Act of 2006.

In a dry 66 page document (which I got about halfway through before wanting to kill myself), the two agencies officially present their plan for implementing the UIGEA in early January 2009, making it one of the last official acts of the outgoing Senate and White House Administration.

The finalized rules include numerous new definitions for terms in the Act including "bet or wager," "actual knowledge," "commercial customer," and "internet gambling business;" however, they fail to define the one definition most lacking in the original UIGEA, that being what is actually considered "Unlawful Internet Gambling."

Instead of opening that unpleasant can of worms, the Agencies chose to pass the buck, stating they had determined that "a single, regulatory definition of 'unlawful Internet Gambling' would not be practical." The Agencies instead chose to leave it to the individual States, arguing that when members of the payment industries need to determine that particular definition, they should first use a "due diligence" approach that examines their individual State's regulations and then leave the burden of proof to the individual gambling business.

In other words, while deciding whether a company should allow payments to a suspect business, they are to examine the laws of the State they are in and then make the businesses in question prove to the company they are not breaking the law. This proof can be supplied in numerous ways - like providing an industry license or certification, or if that is not available, by offering "a reasoned legal opinion" as to why their company is in compliance.

Of course this doesn't cover what a company should do when a suspect business issues a payment, which apparently is as it should be, since the new rules explicitly state the UIGEA is to only block funds going into unlawful gambling web sites but not funds coming out.

"Under the final rule, the term "restricted transaction" would not include funds going to a gambler, and would only include funds going to an Internet gambling business." (page 13)

Obviously, internet poker cannot survive with money going out of the sites yet none coming back in; however, certain interpretations of the new rules do provide a glimmer of hope. For instance, the new rules are not concerned with "money transmitting businesses" that issue checks or money orders. The Agencies believe such methods to fund internet poker accounts would be impractical and would not be widespread enough to matter. Instead the Agencies will primarily focus on internet transactions. So it appears if all else fails, poker players can still walk over to Western Union, or somewhere of the like.

These new implementation rules are bound to create controversy, and anger both opponents and proponents of the UIGEA and it is a fair assumption to assume much more will come to light regarding the UIGEA rules once the payment processors have a chance to fully digest the new regulations. Surely this ongoing UIGEA story will continue to change as the months go by, however at the moment one definitive thing is perfectly clear, the UIGEA will be fully implemented and complied with by, at the latest, December 1st, 2009. The ball is now in the online gambler's court to figure out how to deal with that unfortunate reality.

Story by Mark Anderson
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