On October 13, 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed into law as a part of the SAFE Port Act as a rider. A rider is something that is put on a bill that is being voted upon that may not be related to the rest of the bill. In this case, the SAFE Port Act was a bill related to national security. Because of the upcoming elections at that time, the bill was passed quickly and the final language was not read by many who voted on it.

What is the Unlawful Internet Gambling Enforcement Act?

The UIGEA USA laws essentially stop US players from funding online gaming activities. This is easily regulated, because gaming businesses must be identified with a specific merchant code, and financial institutions are ordered to not transfer money to businesses with those codes. The bill affects banks, credit card companies, Western Union and other third-party entities where money transfers can be initiated. The bill does have exceptions for the lottery and horse racing; it also has allowances for fantasy sports and free gambling-type games. Logistical Issues

Shortly after the Unlawful Internet Gambling Enforcement Act passed, many online gaming operators stopped dealing with American customers, which had a negative effect on the online gaming industry as a whole. Compliance with the UIGEA has been difficult to enforce; banks don't want to devote resources to tracking paper checks, online casinos are finding ways to get different merchant codes, and other countries can't be forced to comply with American law.

The bill was scheduled to go into full effect in December of 2009, but, because of these logistical issues, it still has not taken full affect. Representative Barney Frank of Massachusetts contested the bill and has crafted legislation that would establish regulatory guidelines for online casinos and poker rooms. UIGEA USA laws still have a questionable future and it will be interesting to see what happens with it in the future.