UIGEA Overview

Back in 2006, there was a big push in the United States to create the Unlawful Internet Gambling Enforcement Act legislation, also known as the UIGEA. This has meant that the vast majority of US gaming sites were put in a position where they would no longer be able to offer casino or poker games for American residents.

At first, a number of major US poker sites resisted the change in legislation and in the short-term, they benefitted greatly. With a huge interest in online poker, the few sites that were providing online poker were able to become massive very quickly but problems were on their way. Like so many other problems in life, these issues revolved around money.

Is It Illegal To Play Real Money Poker in the United States?

While many people believe that the UIGEA has made it illegal to gamble online, this is not the case. In effect, the legislation has gone after the online gaming companies and placed the emphasis on them. It was made illegal for companies to knowingly accept payments that would be involved with a bet or wager online. Certain US states may be more distinct and clear about making online gaming illegal but with respect to the UIGEA, nothing really changed for players but of course, if online gaming sites were no longer willing to welcome players, the end result of not being able to play poker or enjoy casino games was pretty much achieved.

One of the biggest problems with the legislation is the fact that it is still a grey area for many people and it is certainly open to legal interpretation. There is no getting away from the fact that the Act has had a huge impact on online gamers, the online gaming companies and the economy as a whole. Any Act that sees a number of top industry figures and personalities being incited, a lot of arrests, millions of dollars being seized and a near shut-down of a multi-billion dollar industry in the US.

Impact on Online Gaming Companies

While it was never illegal for individual US gamers to play online games, the UIGEA legislation had a massive impact on the gaming site providers. After the passage of the act, every online gaming site which was listed on stock exchange markets around the world withdrew from the US. This move was replicated by numerous non-public companies operating in the US market as well.

The fact that major gaming firms were being forced to move out of the market had a huge impact on them with the PartyGaming company, which owns PartyPoker.com, finding that 60% had been wiped off of their share value within 24 hours of the bill being made law. Shortly after, the company was demoted from being listed as a FTSE 100 firm to a FTSE 250 firm.

The fact that PartyPoker willingly moved out of the US market quickly, despite the fact that it was the biggest site in the United States and that US players made up 80% of the overall business for the site, indicates that even the biggest names were scared of taking on the UIGEA. Party Poker also settled up a bill of $300 million with the US Government for their activities in the US before UIGEA was implemented.

Sites like PokerStars and Full Tilt Poker, no doubt seeing so many of their peers and rivals moving out of the market decided that they would step into the void and try to clear up in the online poker sector. These companies were of the opinion that online poker was safe and lay outside the powers of the UIGEA and they really made a play to bring in players. The online and TV promotional activities of these companies were huge but in the short term, it was also hugely successful. They managed to provide a home to the vast majority of poker players who had found themselves with nowhere to play after the demise of Party Poker in the US. Full Tilt Poker and PokerStars were easily the biggest names in the US poker market but then Black Friday came.

Black Friday Clampdown

The Department of Justice seized control of the PokerStars and Full Tilt websites and charged these companies, as well as Absolute Poker, with a number of charges. Bank fraud, illegal gambling offences and even the offence of laundering billions of dollars from illegal gaming proceeds was levelled at the firms. The bank accounts of all three companies were frozen too.

Over time, all of these companies have reverted to banning US players and any US player that had a real money account with the sites found that their online poker account had been frozen. Again, the fall-out and acrimony from these acts have been huge with many poker players deciding to leave the US in order to maintain their career and income or have just given up playing online poker.

A side issue came from the fact that a number of small sites and individuals who acted as affiliates to the online gaming sites were caught up in it all. If a sports site, a local news site or any particular individual website or blog provided links to online gambling sites, they were viewed as being in the betting business and were left open to be in trouble. Many sites were asked to remove their links and in many cases, requests were made to their Internet Service Providers to takes these sites down from being online.

While the situation in the United States is far from ideal, it is not without hope or optimism. There are a number of well-respected online gaming sites which are able to provide casino, sports betting and poker opportunities for players. The number of deposit methods available to players may be way down on what used to be available or indeed what is available in other markets but there is still an opportunity for US gamers to play on respected and quality gaming sites.