Repealing the UIGEA

Repealing the Unlawful Internet Gambling Enforcement Act

The Unlawful Internet Gambling Enforcement Act, also known as the UIGEA, was attached to the Safe Ports Security Act by Senator Bill Frist (R-TN) in the latter part of 2006. It was signed into law in October of that same year by then President George W. Bush. Many people believe the UIGEA outlawed online poker and gambling in the United States while many say it did not.  Those that say it did not say the UIGEA only prohibits banks and credit card companies in the United States from transferring funds between Internet based casino web sites. The one thing that every online player can agree on is this law has made it difficult to fund an online gambling or poker account with real money. My opinion is that the government has infringed on the freedoms of Americans by attempting to make playing online for real money illegal and the Unlawful Internet Gambling Enforcement Act should be repealed.

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By repealing the UIGEA and regulating online gambling instead, the U.S. could bring in much needed revenue and create jobs. The Unlawful Internet Gambling Enforcement Act has not stopped everyone from gambling online and millions of citizens still find a way to continue playing poker for real money. News reports on MSNBC have said that regulating online gambling could bring 42 billion dollars in tax revenue in 10 years and create 30,000 jobs (MSNBC, 2010). With regulations the government could require all gambling sites that want to have Americans playing to have a tax form that would be sent to the IRS anytime a player has a withdrawal of monies won that exceed a certain amount. With the millions of players the United States provide at stake, my guess is that most online gambling sites would gladly agree to follow some sort of fair guidelines. Changing the current Internet gaming laws would also open the doors for American run casinos to have their own online operations, thereby creating jobs.

Most people agree that the government should not dictate how American adults spend their money while in the privacy of their own homes. But for some when they hear the term online gambling they see images of lazy out of shape bums doing nothing but sitting in front of a computer playing games and start to think otherwise. They think of the horror story of a poor soul who has lost all their house rent playing online poker and got kicked out of a home with a wife and 2 kids. While there are cases of this very thing happening online, it happens with land based casinos as well. It is dangerous when the government tells the people what they can do in their own homes. Think of how unhealthy smoking and drinking can be and the billions of dollars it cost the taxpayer in medical costs. Yet we do not see legislation forbidding smoking and drinking in all private residences.

Conservatives and the moral majority argue that online gambling is addictive. With estimates that 10 million Americans play online poker regularly, and that $12 billion was transacted with online gambling sites last year I am sure there is some addiction. And with televised poker tournaments the popularity of poker has gained a tremendous amount of fans and continues to grow. But do we need the government to set laws to prevent all forms of addiction?  The United States went through a period of trying to do that with alcoholism and it didn’t work. “Prohibition didn’t stop anybody from drinking,” says Norman Inkster, former director of an online gambling company based in Toronto. “This law isn’t going to deter those who like to gamble” (Kirby, J., 2007, p. 36-37).

Others say that it is far too easy for our youth to join the rooms and play. But they can also watch porn or buy adult products online. So should the government ban all sites with adult material as well? The answer is no: it should be parent’s responsibility to police what their children do in homes and not the governments. Reputable online poker rooms have already taken measures to try and prevent underage gambling on their sites.  Before making deposits most all online casinos already require photo ID and some even want copies of utility or other bills with matching addresses. With regulation the government would be able to step in and place their own set of rules for verifying a player’s age too.

The UIGEA has turned into a headache for both financial institutions and law enforcement. Before this law went into effect it was fairly simple to use a debit card or checking account with the proper identification to fund most online gaming. Adults wishing to spend money online did not have to jump through hoops to play with real money and banks had no concerns of breaking the law. But since the UIGEA has gone into effect banks now have to police where all transactions go causing undue stress on financial institutions, especially on smaller branches. Just recently Goldwater Bank of Scottsdale Arizona agreed to forfeit nearly $734,000 that the F.B.I. said was tied to online gambling. The bank had already reported a loss of $803,000 in the second quarter of the year, so it is now unlikely this bank will see a profit for the year (Azcentral.com, 2010, para. 1, 5). Because of the UIGEA banks are losing money and law enforcement are wasting valuable hours searching for these so called money laundering cases when they could be concerning themselves with more serious crimes.

The first step in regulating and taxing online gambling has passed the House Financial Services Committee. Representative Barney Frank (D-MA) has been opposed to the UIGEA since 2006 and proposed a bill that would regulate and tax online gambling. Known as H.R. 2267 or the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, it was approved on July 28^th, 2010 by the committee. The vote was pretty much along party lines with only 7 Republicans voting for and 18 voting against the bill while 34 Democrats voted for the bill and 4 voted against it (Gambler, 2010, para. 2). Analyst Michelle says, “Many of these Republicans who want to ban Internet gambling are the same ones who decry the Democrats’ policies for pushing America toward socialism. Yet, when it comes to activities they don’t like, they make the argument that government must intervene in private economic activities and personal lives for the sake of the public good (Minton, M., 2010, para. 5)”. The next step for H.R. 2267 is that it must pass the full House before going in front of the Senate, but with recesses and the mid-term elections coming up in November it is unlikely to happen this year.

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If approved and signed into law by the President of the United States, H.R. 2267 will bring states extra revenue without raising taxes on those who do not play poker or gamble online. At the moment it is estimated $15 billion will be spent on online gambling by Americans this year. If online gambling were regulated and the government was to free up the laws and allow funding of the games that figure could possibly more than triple to $50 billion annually. With taxation states would share in a 6% take on taxes and the Federal Government would get a 2% share (Tharp, P. 2010). This money is just sitting there for the taking. Many good benefits could come from regulation of online gambling with taxation, from infrastructure to health care for the disabled or our senior citizens.

Millions of citizens who believe in the freedom to gamble online have spoken out against the Unlawful Internet Gambling Enforcement Act and have joined organizations that fight the injustice of this law. The most well known and possibly the largest non-profit organization is the Poker Players Alliance (PPA). With former Senator of New York Alfonse D’Amato as its Chairman and over a million members, this non-profit organization has been fighting to protect the rights of the online player. “This is the time to join and have your voice be heard. Show them that the little guy, each one of us, if we join together, can be a powerful force. Let’s use the Internet to communicate with our members of Congress as voters and as American citizens to say that we feel they’ve gone too far in this attempt to ban us from a sport that we have a right to participate in” (D’Amato, A., 2010).

References:

Azcentral.com, (2010) Feds: Bank to Forfeit Funds Tied to Web Scheme. Azcentral.com, Retrieved from www.azcentral.com/business/articles/2010/09/17/20100917biz-Goldwater0918.html

Gambler, C. (2010) Online Gambling Approved by House Committee. Carolina Gambler, Retrieved from www.carolinagambler.com/gambling-bill-approve-by-house-committee/

D’Amato, A. (2010). About us: Alfonse D’Amato, Chairman.   Poker Players Alliance, Retrieved from http://theppa.org/about/board/alfonse-damato/#more-5

Kirby, J. (2007). Bootleggers of the Internet. Maclean’s, ( p36-37). Rogers Publishing Limited.

Minton, M. (2010). Why Republicans should favor legalized Internet gambling. Forbes.com. Retrieved from www.forbes.com/2010/08/12/internet-gambling-regulation-republicans-opinions-contributors-michelle-minton.html?boxes=Homepagechannels

MSNBC (2010). MSNBC TV. Retrieved from www.msnbc.msn.com/id/21134540/vp/38488633%2338488633#38488633

Tharp, P. (2010) Trump’s bet is for online tax. New York Post. Retrieved from www.nypost.com/p/news/business/trump_bet_is_for_online_tax_52trNYOjOBB1FTUYGRZK0M

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