It was the Unlawful Internet Gambling Enforcement Act that put the screws to the online gaming industry, effectively shutting off the U.S. market to the major, publicly traded companies, but the impact has really never been felt because the particulars of enforcing the law have never been clear.
Now that the U.S. Department of Justice has established guidelines, banks are preparing for the December deadline that will put the regulations in place.
Zions Bancorporation has e-mailed customers advising them of the change. “In compliance with the U.S. Unlawful Internet Gambling Enforcement Act, we are required to notify you that you are prohibited from processing transactions derived from internet bets or wagers where such bet or wager is unlawful under any applicable federal or state law,” read an email from Zions-owned Nevada State Bank.
Another of its institutions, the California Bank And Trust, warned its customers that it would “not process transactions derived from internet bets or wagers” and did not distinguish between incoming and outgoing transactions.
The enforcement rules follow a ruling by the Third Circuit Court of Appeals in Philadelphia that upheld UIGEA.
Meanwhile, a campaign launched by the Safe and Secure Internet Gambling Initiative suggested that the U.S. could pay for some of its more pressing needs-including the controversial health-care initiative-by legalizing, regulating and taxing online gaming.
Ads put together by the organization claimed that as much as $62.7 billion in new revenues could be garnered for the federal government in the first decade of legality.
“As Congress searches for ways to pay for health-care reform and other worthy programs, it should end the unsuccessful prohibition of internet gambling and start collecting taxes on the billions in revenue currently lost to unlicensed, offshore gambling operators,” said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative.
House Committee of Financial Services Chairman Barney Frank said he will hold a hearing and markup on the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 this fall. Frank has lined up more than 50 co-sponsors for the act.