News

Sunday, 10 October 2010 10:25

A new law in the making that will require banks and financial institutions to track all international financial transactions may spell the end for the UIGEA.

The creation of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 caused uproar amongst the financial institutions in the United States. Back them they made it very clear that the law would be practically unworkable as was and still is almost impossible to identify and then block transactions originating from online gambling operations. 

Finally lawmakers are drafting a new law that could very well prove the point that financial institutions have been trying to get across for over four years. The proposed law would require that all international financial transactions to be tracked by the financial institutions. The creation of this new law is primarily for calling a halt to terrorists being funded by groups based in countries outside the United States.

While the new law is not being created to specifically target online gamblers, international monetary transfers are their preferred means of funding and collecting on their particular form of entertainment. So although poker players in particular are not being specifically targeted by this law, they are still wary because neither were they specifically targeted of the UIGEA.

The proposals may be causing a stir amongst online poker players, but it may turn out that this law will do them more good than they may expect. This is because by putting into place measures to track all financial transactions, the banks and credit card companies will be provided with the means to prove conclusively the difficulty they face in deciphering which of those transactions are originating from companies offering online gaming services.

The main reason the banks are having such a hard time identifying the true origin of Internet gambling transactions is due to most gambling websites using third party payment processors to handle their financial transactions. Many of those payment processors altered the detection code used by banks, making the transactions appear they are originating from legitimate businesses. By being accountable for providing a full list of all transactions to lawmakers, the banks will be given the ability to prove their point and show how unworkable the UIGEA really is.

The UIGEA came into being through the political back door, being added on to a border security measure Bill. That Bill passed and with it the UIGEA. Since they came to power, Democrat Barney Frank has been trying to overturn the UIGEA. However, due to the current political situation, is seems the only way to do that will be to use the same tactic by which the law was initially created.