Why Everyone Should Care About UIGEA

Many non gamblers have never heard of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) and if they have heard if it they probably don’t think it affects them in any way. This law in essence deputizes banks and other financial institutions and gives these institutions powers over and above what current law allows.

To understand just what is at stake for the average citizen a brief history of how this law came to be is in order. The Unlawful Internet Gambling Enforcement Act of 2006 was attached to a port security bill and was presented in a late night session of congress with no review and no time for debate. The bill had several prominent sponsors including, Bill Frist the GOP senate majority, Jim Leach, former chairman of the House Banking committee, Robert Goodlatte who co write the bill, and John Kyl. The bill was presented at midnight the day before congress adjourned for the 2006 elections. The gambling bill had been presented by itself and was defeated in the senate so the sponsors resorted to tacking it on a port security bill that no member of congress could possibly vote against without severe political repercussions. Exceptions were made for fantasy sports, horseracing, and lotteries. The bills main sponsors had connections to one or more of these industries.

There are many reasons why non gamblers should be concerned about the ban on internet gambling. First and foremost is the violation of the right to privacy which most Americans hold near and dear. Since the days of the American Revolution individual rights and personal freedom have been a hallmark of life in the United States and most citizens are resentful when these rights are violated or restricted in any way.

Since the passage of UIGEA many online payment processors such as Neteller have exited the US market leaving consumers with fewer choices. Neteller, like Paypal, was one of the more reliable online payment processors and its exit from the US market leaves consumers at the mercy of less reliable e-wallets. Neteller, although based outside the US, employed many US citizens who lost their jobs when Neteller exited the US. Happily, the company has survived and is doing well and reliably serving markets in Europe and Asia.

By banning activities that some find objectionable we are establishing a bad precedent. Using the logic behind UIGEA any activity could be banned for any reason no matter how innocuous that activity may be. In essence we are adding to the already too long list of victimless ‘crimes’. Given the state of national security today and the very real threat of terrorism do we really want valuable government resources wasted enforcing laws against activities involving consenting adults?

Banks and other financial institutions have had unwanted law enforcement responsibilities forced on them complete with rules that are vague at best. With these responsibilities come added expenses for these institutions which in all likelihood will be passed on to their clients no matter whether they gamble or not. This is essentially an unfunded mandate from government and the banking industry has no choice but to comply.

Credit card companies are also burdened with additional enforcement responsibilities. The credit card industry uses codes for various transactions including gambling. While it is relatively easy for the credit card industry to block gambling related transactions UIGEA opens the door for less than scrupulous companies to use uncoded transactions often involving offshore banks not subject to the same stringent regulations as US banks.

Gambling has a long and colorful history in the United States. Since the first settlers arrived in Jamestown in 1607 gambling has existed in one form or another in the US. Lottery proceeds helped to finance and establish educational institutions such as Harvard, Yale, Princeton, William and Mary and many others. The first racetrack in the US dates back to 1665 and card and dice games were common in taverns and roadhouses in pre revolution America. Poker games have taken place in the White House and it is well documented that Truman played poker for recreation at the post war conference at Potsdam where the future of Europe was being decided. Richard Nixon financed his first campaign for public office with funds obtained from poker games while he served in the military in World War Two. Gambling is an American tradition as old as the country itself.

Personal responsibility and liberty also are long standing American traditions. Studies show that most online gamblers are middle to upper middle class citizens, employed and otherwise law abiding. Most online gaming sites have programs in place to identify problem gamblers and the ability to deny credit card transactions from their accounts. Hopefully with a new administration due to take office in the 2008 elections we will see a return to common sense and personal liberty.