Understanding the Impact of UIGEA on Online Gambling in the USA

The explosion of online gambling across the USA in the late 1990s and early 2000s became of concern to the US government. At the time, the only legalized casino gambling in the US was taking place in person at government-licensed land-based casinos, or at any of the government-approved tribal casinos around the country. There was no form of legal online gambling permitted in the USA prior to 2018.

These online gambling sites that were accepting American players were all based and/or licensed in foreign countries. It was the opinion of US lawmakers that they were operating illegally by taking on US customers.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), which was designed to bring a halt to this rash of online gambling in the country. It was signed into law by President George W. Bush in October of 2006.

While the Federal Wire Act of 1961 prohibited the transfer of funds electronically for the purpose of betting on sports, it said nothing about games of chance such as casino gambling, sports betting sites and poker. The UIGEA closed that loophole.

Almost immediately, any public gambling companies trading on the London Stock Exchange halted the acceptance of US customers. Online poker sites such as Party Poker made a hasty exit from the US market. In fact, the online poker industry in the USA was basically eradicated overnight, as the US government seized their domain names.

Fast forward 12 years to the striking down of PASPA and the opening up of widespread legal and regulated online gambling in the USA. How does the UIGEA impact these entities?

The fact of the matter is that it doesn’t. Today, as long as you are doing your casino gambling via a legal and regulated online site, you’ve got nothing to worry about. You are following the rules.

However, if you are choosing to gamble through one of the unregulated offshore accounts . . . well, so far, you’ve also got nothing to worry about. For all the government’s bluster and threats, even with the fact that you are involved in what is considered to be illegal gambling activity, there’s so far been no instance of the government prosecuting anyone doing business with one of these offshore sites.

That being the case, you’re still wiser to stick with a legal and regulated site. Should you ever run into an issue with the operator, at least with a regulator overseeing the site, you’ve got an entity with which to register a complaint. And since these sites require a license to operate, they are more likely to be cooperative and to make certain your gambling experience is the best it can be.