December1st Potentially scary day for Online Poker (go back »)

Lots of people who follow Online Poker have been concerned about what will happen when the calendar hits December 1, 2010. That is the day the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). In its simplest form the law prohibits the transfer of funds from a financial institution to an illegal Internet gambling site, specifically excluding fantasy sports, online lotteries, and horse/harness racing. The initial passing of this legislation in 2006 was the cause of many Poker sites (and online casino sites) to pull out from the United States market.

So, will Online Poker grind to a halt December 1st? At the moment it does not appear so. The legislation and its implementation are under attack on several fronts, although it seems doubtful any of these attempts will succeed prior to December 1. In any case, Barney Frank (D) Mass, and the Poker Players Alliance have been working hard to prevent the UIGEA from taking effect.

For those wondering what will happen if they are not successful by December 1, the good news is it appears Financial Institutions will not be working hard to universally prohibit your poker transfers. A recent, excellent article titled "U.S. Banks Offer "Due Diligence" as UIGEA Deadline approaches", states that for now the extent most banks are willing to go is to send all Account Holders "due diligence" notices with their bank statements similar to this:

"As a (fill in the blank) customer, we'd like to inform you that in accordance with the requirements of the Unlawful Gambling Enforcement Act of 2006 and Regulation GG, certain transactions are prohibited from being processed through your account

Prohibited transactions include those in which a person accepts credit, funds, or other proceeds from another person in connection with unlawful internet gambling. If you have any questions or concerns regarding this regulation, please contact us."

The UIGEA achieved one of its initial objectives of scaring off potential newcomers, along with publicly traded companies who didn't want to challenge the government on the legislation, but in the end the legislation was so poorly thought out that when it came time to write the regulations for it the Treasury threw up its hands and essentially said it wasn't possible, so they wrote a set of rules that demanded that the financial institutions do their dirty work for them.

If poker players are lucky, the initial indications are that banks are going to send out these letters to all customers telling them that the UIGEA is now law and please don't bet online. Anything beyond that isn't the banks problem. We can only hope this is the case, and that all the people fighting for online poker in the United States will eventually allow Americans to play poker online in their own homes.

In Online Poker News