his speculation ranges from no major impact at all to a complete lockdown of US accounts. What will actually happen is unclear, but there are very good reasons to suspect that UIGEA’s enforcement will only be a minor inconvenience to players. The act’s controversial ideas, vague wording and limited reach leave the issue open to debate.
Meanwhile, strong opposition from major poker networks, the thousands of active online players and several congressmen threaten its effectiveness. This article explains what June 1st will mean to players, poker sites and banks. One of the biggest reasons to suspect that UIGEA will not result in blocking online poker comes from the act itself.
UIGEA was passed in October of 2006 as part of the SAFE Port Act, a bill designed to improve the security of US harbors. Harbor security and online gambling are, of course, completely unrelated. They are only connected by the UIGEA, which was attached to the SAFE Port Act as a provision just before the bill was passed by a nearly unanimous vote. The UIGEA immediately became controversial because it was passed without the chance for debate.
Since 2006, the deadline for enforcement has been pushed farther and farther back until now, when the legislation will finally go into effect. Senate Minority Whip Jon Kyl set this deadline through a deal with the Obama administration. As the act’s biggest supporter, Kyl fought for the deadline by blocking US Treasury nominees from being allowed to take office. Treasury Secretary Tim Geithner promised not to delay enforcement if Kyl would let the nominees take office, leading to Tuesday’s deadline.
Advocates for internet gambling believe that all the politics required to enforce the bill suggest that it is unpopular and that enforcement may be limited.
The wording of the UIGEA also leaves room for online poker to continue to function. One big issue is that the act does not define what activities are considered gambling and does not officially name poker. If the status of poker were changed to a game of skill, like the Poker Players Alliance wants, it would be exempted from the act.
The UIGEA also does not make internet gambling illegal. Instead, it makes it illegal for a bank to allow a transfer to an online gambling site. It does not include guidelines on how to prevent transfers. In fact, the June 1st deadline is actually the date when banks must implement their own policies to do this, and poker networks could still find a way around it. With these problems, the bill may be impossible to enforce.
The biggest problems come to poker networks that operate within the US because poker accounts are considered by some as online bank accounts. The Department of Justice does not have jurisdiction outside the US, but can potentially seize poker accounts on US based sites. However, there are other legal issues that make this action questionable.
In short, the UIGEA most likely will have only a small impact on players. It does not make online poker illegal, nor does it make playing poker an illegal activity. It also cannot charge people who make a deposit to or withdrawal from an online poker site. Really, the UIGEA is only concerned with banks and poker sites. As far as policy goes, that is up to banks. Banks want to keep customers, so it is very unlikely that they will do anything with these transactions besides denying the transfer and sending the funds back.
For making deposits, the UIGEA may make things generally difficult. However, poker sites are likely to find another method to get around the issue. With withdrawals, banks would have to track every single paper check they receive to prevent payouts, so enforcement is nearly impossible.
As for online accounts, there is no simple answer. If the government is able to seize accounts on poker sites, it will involve a difficult legal battle. Most of the most popular sites have not given a clear final response on the UIGEA, but seem ready to resist the act.
One site, PokerTime, has already announced that it will no longer accept US players after June 1st. Anyone using this site will automatically have all funds withdrawn before then.
Meanwhile, Bodog Poker announced that it will stay open. In an email posted on a 2+2 forum, a representative wrote, “We are confident that we can sustain our partnership with US players for a long time.” The site stated that after the act was passed in 2006, “We adjusted our business model to accept those changes and if there are further negative additions to the Act we will adapt again.” Because Bodog is not based in the US, they can easily evade enforcement.
The two largest US sites, PokerStars and Full Tilt Poker, have an unclear future. Because they are so popular, it is unlikely that they will willingly stop accepting US players. They are poised for a legal battle, and claim that providing peer-to-peer poker games does not violate UIGEA or US law. They do not consider themselves a bank and argue that UIGEA can only effect banks, and therefore cannot seize the accounts on their sites. Whether these sites withstand the regulation or not remains to be seen, but it seems clear that many sites that allow US players will continue to function.
There are a number of possible ways to end enforcement of the UIGEA for online poker. One solution could come from Congress, where there are currently bills in both the House and Senate that would overturn the act. The main opponent of the act, Representative Barney Frank, is working on gambling regulation and consumer protection acts to overturn the law as well. It is also possible that financial reform could allow the government to regulate and tax online poker, effectively ending the UIGEA. Organizations like the Poker Players Alliance are working to make the opinion of poker players heard in Congress.
Another possibility would be through the courts. If a court case declares that the UIGEA is illegal or if a case determines that poker is in fact a game of skill, the act would no longer apply. Also, individual states can still regulate online poker or gambling within the state and allow networks that only state citizens could play on.
Perhaps the best way to bust the UIGEA is simply to allow the act to flop. With so many challenges, enforcing the act might not be possible. And based on the constant delays and opposition to the act, it seems that the government may not be committed to fully enforcing the bill.