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US Online Poker Ban
Thursday, October 5, 2006 | Adrian Milewski
This week has been a crazy week for the world of online poker with the passing of the US Unlawful Internet Gambling Enforcement Act which is an attempt to prevent Internet Poker and gambling for US citizens. There is a lot of panic going on and below we attempt to give you the key information and facts on the issue.
Introduction – What’s all the Fuss about?
The 2006 Unlawful Internet Gambling Enforcement Act has been bouncing around the US for a while but up until now Senator Frist from Tennessee (the sponsor of the bill) has failed to get it through congress.
The Unlawful Internet Gambling Enforcement Act of 2006 passed Congress this week after the knowing full well he couldn’t get it through on its own merits piggybacked the gaming bill onto another completely irrelevant Safe Port Act. The outrage of this is that the Safe Port Act is a homeland security bill and was sure to be voted through congress and Frist took advantage of this by tagging on an extra 30 pages to it to include the irrelevant Online Gaming Bill.
The Safe Port Act was passed by congress this week and Senator Frist got his wish and now Online Poker players and gamblers in the US will have a hard time trying to fund their online accounts.
Summary of the 2006 Unlawful Internet Gambling Enforcement Act
The bill doesn’t directly ban an individual from playing poker or gambling on the internet. Instead it targets the financial institutions and puts restrictions on them funding online gambling accounts. Banks and financial institutions are now required to monitor transactions and block any transactions from payment providers for online gaming.
The Act states that “No person engaged in the business of betting or wagering may knowingly accept any money transfers in any way from a person participating in unlawful Internet gambling.” However the act is limited to Internet gambling businesses and does not target the individual players.
The Fallout
It is still early days but so far the fallout for the Online Poker world has been significant. A number of the large card rooms have announced that they are no longer accepting bets from US based players.
This has had a disastrous effect on the share price of these companies with Party Gaming, 888.com and Sporting Bet’s share prices falling dramatically after these announcements due to the fact that it is estimated that the US market represents about 50% of the $12 billion a year Online poker market.
Although some operators have announced they will no longer be accepting US players other’s have announced that it is business as usual and are under the belief that this new Act doesn’t apply to the Gambling Operators but instead just to the Financial Institutions processing the payments.
What are the reasons for this bill?
The official reasoning for this bill is that it is an act to prevent gambling addictions and this is the view being presented by its sponsors in the senate.
Away from politics and outside the US the view is a lot different and it is strongly felt that these measures have been taken for more sinister reasons, and these are a result that a large portion of the $12 billion a year Online Poker industry comes from the US and that this revenue is going to non-US companies such as those listed on the London Stock Exchange.
The consequences of this act will not only be felt in the US by upset online poker players but perhaps the largest effect of these actions are already being felt outside the US with large Non-US companies such as Party Gaming, Sporting Bet and 888.com already losing three quarters of their share price. The long term effect on these companies will surely be that thousands of jobs at these companies are at risk.
How will it affect Neteller and other on-line companies which can be used to fund a poker account?
There is already a lot of debate about how off-shore payment processors such as Neteller will be affected by this act. At least for now Neteller have not changed their stance and it is still available to be used to fund your online poker account.
We’ll have to wait and see whether this remains the case but it is still unknown how companies such as Neteller will be affected and it will take a number of weeks / months for this to be established.
Neteller may well maintain their current stance that it does not need to comply with the Act as it is not subject to U.S regulations and also Neteller have always claimed that they are not a ‘financial institution’.
It remains to be seen how far US regulators will go if a Third Party Payment processor such as Neteller took this stance and whether they would then attempt to block transactions to Neteller.
It is also important to note that financial institutions that are affected by this act now have a period of 270 days to implement the changes and so this could well provide a grace period before this all takes effect depending on the reaction of the online card rooms.
I’m not in the US – so it doesn’t affect me right?
Wrong – although it doesn’t directly affect your ability to play online poker or to gamble on the internet it has had a massive effect on the world on Online Poker and Gambling. This Act is bad for Online Poker as a whole and will affect all online poker players in the long term.
The Poker Boom that you have been a part of recently will take a massive hit which will affect promotions that we have all grown accustomed to. Party Poker has already cancelled their “Monster” tournament promotion.
Where can I still play poker as a US Resident?
Companies that have stated that it is Business as Usual and they will still allow US players.
Companies that are still accepting US Players but have not stated their long term position yet
Companies that have stated they will no longer be accepting transactions with US players.
This is Outrageous – What can I do about it?
Everybody in the poker world agrees with you and the only way to fight this is to have your voice heard.
Make sure that your local media are covering the Act and the massive effect it is having not just on the US but also on the rest of the world. Also ensure that they are covering the underhand way that the Act was passed by attaching it to the back of an irrelevant act. If they are not covering it then Phone / Fax / Email / Write to them to ensure they know people want this story to be covered.
You can forward them to this press release which has been released on the subject
If you are in the US - you can also make sure that your senator knows of your objection to this act and that it will be affecting the way you vote in the upcoming elections.
For other co-ordinated efforts then take a look at the which is a non-profit organisation fighting for the rights of Poker Players. We strongly suggest that you become a member of the Poker Players Alliance and support their fight against this Act.
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- Neteller withdraws from the US gambling market
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