The Unlawful Internet Gambling Enforcement Act of 2006 is title VIII of the Safe Port Act, HR 4954, dealing with port security. This act has, apart from the title VIII, nothing to do with the subject of gambling. The implications of this act for the entire gambling industry and its service providers are yet difficult to assess. We, therefore, plan to report continuously on this subject, divided into the following sections:

 

1. The Act
2. The Chronology of Events
3. The Reaction of the Gambling Industry
4. The Reaction of the Service Providers
5. The Reaction of the International Media
6. The Reaction of the Readers of This Site.

 

 

Here are also some interesting video clips on this issue:

 

1. Libertarian vs. Congress: Don't regulate the Internet
2. Rep. Shelley Berkley wants to know, what the Port Security Improvement Act has to do with Internet Gaming
3. How US Congress Betrayed US Population
4. Senator Frist and the Online Gambling Ban (Mr. Bill)
5. Republicans twisted plot to keep people from playing poker
6. internet gaming
   

As already mentioned, the complete text of this act can be found on pages of the Conference Report: . However, the legal mumbo jumbo contained in these 30+ pages are practically beyond comprehension of the majority of the readers of our site, who are more or less experts in the art of gambling, but not in the interpretation of legal texts. Therefore, we now take recourse to the analysis of this act by someone recognized as a leading authority on gambling laws. We are referring to Professor I. Nelson, an internationally known scholar, public speaker and writer. He is a 1979 graduate of Harvard Law School, a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law. He is also well known for his internationally syndicated column, "Gambling and the Law®," and his landmark 1986 book by the same name.

 

Professor Rose has now published on his homepage the article : Gambling and the Law Unlawful Internet Gambling Enforcement Act of 2006 Analyzed. (© Copyright 2006, all rights reserved worldwide.  Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com.)

According to Prof. Rose, the Act "was rammed through Congress by the Republican leadership in the final minutes before the election period recess. According to Sen. Frank R. Lautenberg (D-NJ), no one on the Senate-House Conference Commttee had even seen the final language of the bill". In fact, Prof. Rose points to certain formulation at the end of §5365 of the Act which does not make any sense. He observes: "This could be a typo, since the bill was rushed through without an opportunity to even be read".

 

We strongly recommend everyone interested or involved in gambling to read this article.

 

This legislation will be effective upon President Bush's signature, expected to be provided in the near future, and made into law 270 days thereafter, around June 2007.

 

Read also the article: Internet Gambling Funding Ban written by Chuck Humphrey, a lawyer and one of the founders of the Tournament of Champions of Poker and of Team Pegasus, an association of professional tournament poker players. In this article, published in Gambling-Law-US.com, he makes a thorough analysis of the Act as well as of several reactions to it by online gaming sites and others.

 

• Reaction of the gambling software providers:

 

Cryptologic, one of the leading Internet gaming software developers, announced Oct. 2, 2006 announced that "effective immediately licensees of WagerLogic Limited, the company's licensing subsidiary, will not take wagers from U.S.-based players". With more than 70% of its licensees' revenue now coming from outside the U.S, they consider themselves "positioned for long term profitability and growth" despite the new U.S. developments. Read more..

Playtech, who claims to be the world’s largest publicly traded online gaming software supplier, announced that "following the passing of the Internet Gambling Enforcement Act 2006, it will stop licensing its software to existing and future operators who accept bets from US players with effect from the date the Act becomes law". They are confident that they have sufficient business opportunities in Asia, Europe and South America. Read more..

 

 

 

• Here is a selection of information we have received from various casino partnership organizations:

 

Belle Rock Entertainment, who owns the casinos The River Belle, The Gaming Club, Lucky Nugget, and Jackpot City, has announced that from "Friday, October 13th, at 11:30 am EST no further transactions from either new or existing players residing in the States listed below, will be accepted:

1. Michigan
2. Illinois
3. Louisiana
4. Oregon
5. Washington
6. Wisconsin
7. Indiana
8. Nevada
9. South Dakota
10. New Jersey
11. New York "
    

 

CasinoBlasters, who work with the casinos 24Kt Gold Casino, Aspinalls, Flamingo Club, Golden Palace, Grand Online Casino, and OnlineCasino.com, "is in the process of consulting legal counsel, but until further notice it is business as usual." However, they are now encouraging their affiliate partners "to diversify into regions of the world other than the USA. Just as a prudent investor spreads capital across different stocks and sectors, affiliates also are encouraged to expand their advertising reach into as many different areas of the world as possible."

 

CPays, who work with the casinos 32Vegas, Amber Coast, Carnival, Club Dice, Diamond Club, Joyland, New York, Playgate, and Prestige, admits that "many of the websites we work with have decided not to accept wagers from residents in the United States. We will therefore stop handling U.S.-based traffic."

 

Club World Casinos - Club USA Casino, Club Euro Casino, Club UK Casino - continue to take USA players. "The new Bill did not make online casinos illegal and did not have any legal impact on players; players will not be guilty of an offence under this Bill. The Bill referred to illegal gaming operations, which online casino shave never been proven to be."

 

Focalclick, has issued the following statement: "As of October 3, 2006 The Sands of the Caribbean and Omni Casino are no longer accepting players from the US. Luckily, our RTG casino, 49er Casino, has not banned players from the US if they're able to fund their accounts. As you can imagine, this has had an impact on all three casinos. While the activity and revenue at The Sands and  Omni, have decreased the opposite is happening at 49er."

 

Fortune Lounge. who owns the casino brands Royal Vegas, Platinum Play, Vegas Palms, 7 Sultans, Desert Dollar, Fortune Room, Vegas Towers and Vegas Villa, "has decided to halt all business activities in the following states: South Dakota, Nevada, Oregon, Wisconsin, Washington State, Indiana, Louisiana, Michigan, Illinois, New York and New Jersey. As of October 13, 2006 at 12 PM EST, Fortune Lounge will stop accepting any new accounts or bets from players in the above states."

 

GamblingWages, who work with the casinos Cirrus Casino, Cool Cat Casino, Club Player Casino, and Palace of Chance, issued the following statement: "First of all we want to make clear to all our USA players that this Bill does not make online casinos illegal and that it will not have any legal impact on players, as they will not be accountable for any felony under this Bill. It is only fair to let you know that in the future this Legislation may have an impact on the ability to make deposits, however it is still left to be seen what actions are taken to enforce this bill and what actions are in reality of use. Additionally, the online casino industry is analyzing what effect, if any, this bill will have on all alternate payment methods, such as NETeller, FirePay, Click2Pay, Citadel, etc, and how they will be able to arrange their operations so that they can continue to process gaming transactions? Please be rest assured that GamblingWages casinos group's commitment to all USA members remains the same as always."

 

golden[star]network (gsn), who works with the casinos Golden Riviera, RiverNile, Miami Paradise, and Slots Royale, reported: "Pending the signing of new laws in congress, we may have to block play from states in which online gambling is deemed to be illegal, with effect from 13 October 2006."

 

The Intercontinental Online Gaming (IOG) casinos 50 Stars Casino, Fair Poker, Swiss Casino, Casino King, Casino Las Vegas, Magic Box Casino and Miss Bingo " are sad to announce that, effective from today, Friday 13th October, we will no longer be able to accept any new US based players, and that those US players already enjoying our services will no longer be able to wager and deposit at any of our clients.

The world is a very large place though, and IOG Casinos will now be concentrating on traffic from the non-US English speaking world, and mainland Europe."

 

Jackpot Factory, who work with the casinos All Slots Casino, All Jackpots Casino, Wild Jack Gaming, and First Web Casino, has issued the following statement as response to the Act:

 

"October 4, 2006 – The management of the Jackpot Factory Group, along with the rest of the online casino community, learned last weekend that the US Senate passed the Unlawful Internet Gambling Enforcement Act, which in essence prohibits banking and payment processors from making or receiving payments from online gambling operations.

Without a doubt, this is a serious development in our industry; however, the Jackpot Factory Group and its casinos are continuing with business as usual for the foreseeable future. We are committed to providing a fun and reputable online casino experience.

Over the course of the next few months, the Jackpot Factory Group, along with BrightShare, our exclusive affiliate program, will continue to monitor this situation. More importantly, though, players will still be able to find safe and secure online gambling at any one of our casinos and affiliates will continue to receive the professional service that they have come to know." 

 

Kismet Affiliates, managing the Harrods Casinol, Red Lounge Casino and Private Casino, does not have any problem because "Our casinos have never accepted players from USA. This means peace of mind for you, as the US department of justice targets not only online gaming executives but also those promoting online gaming to US residents." 

 

Mainstreet, managing the Sun Palace Casino, SlotsPlus, Vegas Online Casino and Las Vegas USA Casino has changed their casino software plarform from PlayTech to  Real Time Gaming (RTG) owing to PlayTech's decision not to allow Americans to play on it's software platform.

 

Roxy Affiliates representing the casinos Roxy Palace and Vegas Splendido reported on 13 October 2006: "

The Port Security Bill with the attached Unlawful Internet Gambling Enforcement Act prohibiting the acceptance of payments for unlawful internet gambling is expected to be signed into law in the US today. In light of this, it is with regret that the casinos and poker room represented by Roxy Affiliates will no longer be accepting bets from those players residing in certain affected USA states.

The states likely to be affected are:

1. Michigan
2. Illinois
3. Louisiana
4. Oregon
5. Washington
6. Wisconsin
7. Indiana
8. Nevada
9. South Dakota
10. New Jersey
11. New York "

 

Tradalnet, an EmpireOnline Company, working with the casinos EnterCasino, CDPoker, Noblepoker, ClubDice Casino, MonacoGold Casino, Carnival Casino, 888Casino, Reef Club Casino, and Peach Casino, "has decided to stop accepting new real-money players from the USA. This will come into effect immediately upon President Bush signing the legislation."

 

Vegas Partner, consisting of 777 Dragon, Arthurian Casino, Casino US, Crazy Poker, Crazy Vegas Casino, Cinema Casino, Maple Casino, and Sun Vegas Casino, decided initially "that we will be continuing business as usual for the time being.Once it is clear how the new law is interpreted, we will work at finding solutions so that your play with us can continue to be unaffected". However, a few days later:

"Pending the signing of new laws in congress, we may have to block play from various states from 13 October 2006: Illinois,  Michigan,  Wisconsin, Washington,  Indiana, Nevada, Oregon, Louisiana
South Dakota.

... We are busy interpreting the laws and are investigating solutions."

 

VIP.com announced:"As a current member of the Microgaming poker network, VIP.com Poker regrets to inform you, effective immediately, that players that reside in the eleven U.S. States listed below will no longer be able to gain access to VIP.com Poker:

Michigan, Illinois, Louisiana, Oregon, Wisconsin, Washington, Indiana, Nevada, New York, New Jersey and South Dakota

The blocking of players from these select U.S. States is a result of Microgaming's response to the recent Unlawful Internet Gambling Enforcement Bill in the U.S. Affected States are those that have specific legislation banning online gambling or States that have represented that their conventional anti-gambling laws would cover online gambling.

VIP.com Poker sends its sincere apologizes to all affiliates and players affected by this recent development and confirms that they are busy working to find a long-term solution that will allow players from around the globe access to their poker room."

 

Here is a selection of statements from organisations representing various gambling industries:

 

American Horse Council Press Release: The bill protects racing by maintaining the status-quo with respect to racing’s interstate wagering activities under the Interstate Horseracing Act,” said <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:PersonName>Jay Hickey</st1:PersonName>, President of the American Horse Council.

 

 

More news from the gaming industry to follow.

Association of Professional Casino Webmasters (APCW) has created a special page on their website to organize a campaign to "fight the hypocritical, lying, corrupt political machine". The motto is: WE NEED TO ACT TODAY! TOMORROW WILL BE TOO LATE! You will find there two videos which the visitors are requested to watch, download and sent to their friends and familiy. One of the videos is titled: How the US Congress Betrayed the US People. The other one is titled: The Truth About the Corrupted Politicians who Passed the Gambling Ban. You will also find a list of US news outlets with phone numbers as well as the phone numbers of the White House. The online phone listings of the House of Representatives and the Senators are provided. The US citizens are urged to contact their Congressmen.

 

 

iGaming Corporation owns and operates electronic gaming related marketing assets, including websites, client -server software, publications and call centers. They published on Oct. 03, 2006 the press release iGaming Management Comments on U.S. Unlawful Internet Gambling Enforcement Act. They say: "The Company’s strategic plan involves the securing of long-term advertising contracts with online sportsbooks, casinos and poker operators. If the UIGE’s enactment results in the closing down of gaming operators, the Company's future advertising business may be negatively affected".

 

Interactive Gaming Council (IGC) What a contrast between the U.S., which after all went through a notoriously unsuccessful attempt to ban alcohol, and Britain, which is methodically preparing to license and regulate online gambling, starting next year - Rick Smith, executive director of the IGC Read More..

 

Neteller readjusts its position to the US Gambling Act. While in a press release dated 12 October 2006, Neteller had stressed that "the Company will continue to operate its business to minimise any potential adverse impact, maintaining existing customer and merchant support across all the markets it currently serves", it announced on 19 October 2006 an update conceding that it "will comply with the Act and its related regulations as if it were subject to the Act’s jurisdiction. This action is intended to ensure that the Company is able to continue to operate with the support of its principal commercial partners and to protect its shareholders, business partners, employees and reputation".

 

 

BBC News: Whether or not you approve of gambling or online gambling, and whether or not you think that this move smacks of hypocrisy or is a blatant attempt to protect the US gaming industry from overseas competition, the law provides a good example of how governments can control the internet.

Instead of trying to manage the technology by banning poker-playing software or insisting that service providers block online gaming sites - neither of which would be effective anyway - the law puts pressure on the banks who actually move the money around. - Bill Thompson Read more.. 

 

BBC Caribbean.com Over US$7 billion was wiped off the market value of companies that were worth US$12 billion. Revenues to the UK government - and more significantly to governments of Caribbean countries such as Antigua and Barbuda, Belize and Costa Rica - will be reduced immediately and employment will be adversely affected. - Sir Ronald Sanders, Business executive and former Caribbean diplomat Read more..

 

Brandweek October 13, 2006 Bush signs Unlawful Internet Gambling Act, but action remains hot among online gaming sites Read more..

 

CardPlayer.com The new bill does not make online gaming illegal where it was not illegal before. ... It is a bill whose goal is to enforce laws that already exist. - ALLYN JAFFREY SHULMAN Read more..

 

Casinomeister My advice to affiliates who reside in the states, you should consider moving your affiliate sites to a server not located there. - Word From the Meister Read more..

 

eGaming review October 13, 2006 Let Reality Speak : David Carruthers, chief executive of BetonSports, repeats his call for US legislators to admit egaming’s popularity and act to protect consumers Read more..

 

family.org  Internet Gambling Legislation Passed: A Victory For Families Read more.. 

 

Financial Times FT.com New US legislation against online gambling could open up the US to fresh international pressure from the World Trade Organisation over protectionism in the sector, write Daniel Pimlott in New York and Stephanie Kirchgaessner in Washington. Read more..

 

Gambling Law US The basic thrust of the law is to try to cut off the flow of funds from U.S. gamblers to online gambling websites.  The Act does this by criminalizing the acceptance of U.S. initiated financial instruments by operators of online casinos, cardrooms and sportsbooks and by prohibiting U.S. financial institutions from processing transfers of funds to them under regulations to be drawn up by regulators of financial institutions. - Chuck Humphrey Read more..

 

Guardian Unlimited Online bookies ask WTO for rescue from 'Armageddon':PartyGaming, the biggest online gaming company, said yesterday that it was cancelling its first ever dividend. Its shares fell by another 9% after a 58% fall on Monday, closing at 41p. World Gaming said it was now in technical default of its loan conditions, sending its shares down 2.75p to 16.5p.

Two other leading British online gaming companies held out the hope that the World Trade Organisation could come to their rescue and overrule the legislation that wiped an estimated £4bn from the sector's value on Monday. - Hans Kundnani Read more

 

Las Vegas Sun Web gambling sites keep advertising, despite crackdown DAVID B. CARUSO, Associated Press Read More..

 

MSNBC Proponents of the measure heralded its passage as a victory for family values and a blow against an addictive vice ... But U.S. casinos hoping for a slice of the $12 billion online market aren't so sure the party is over. They see a reason to celebrate in the language that ended up on the Senate's cutting-room floor. Unlike the version that passed the House earlier this year, the approved legislation does not explicitly outlaw betting on online casino-style games, such as poker and blackjack. Read more..

 

MSNBC October 19, 2006 Online Gambling Goes Underground - Catherine Holahan: The author of this report estimates that this US law may do little to deter bettors. It will rather drive the gambling practice "more into the shadows". Read more..

 

TalkLeft: The Politics of Crime October 13, 2006 Say Goodbye to Internet Gambling -Jeralyn E. Merritt Defence Attorney and creator of TalkLeft Read more..

 

Telegraph.co.uk Sportingbet sells US division for $1 - David Waller and David Literick Read more..

 

The Washington Post October 14, 2006 In the United States, the Justice Department and federal courts are unable to agree on whether Internet gambling is illegal - Frank Ahrens Read more..

Timesonline, October 14, 2006: Online gambling groups flee US law : The passing of the act sparked a stream of announcements by London-listed operators confirming the sale or closure of their US operations - Dominic Walsh

We will publish here the reaction of the visitors of this site. Everyone is welcome to contact us at editor(at)online-casino-newsroom.com

 

Sep 30, 2006 The SAFE Port Act passes both the Senate and House

Oct 13, 2006 President Bush signs the Act.

Mar 30, 2007 WTO issues compliance panel report on gambling dispute between USA and Antigua and Barbuda and includes special reference to the relevance of UIGEA

Apr 26, 2007 Barney Frank introduces HR 2046, Internet Gambling Regulation and Enforcement Act of 2007 (IGREA)

May 3, 2007U.S. Representatives Shelley Berkley (D-NV) and Jon Porter (R-NV) introduces the Internet Gambling Study Act (HR 2140) calling for comprehensive study on Internet Gaming.

June 7, 2007Rep. Robert Wexler (D-FL) introduces HR 2610, the Skill Game Protection Act to amend federal criminal law to exempt from the prohibition against transmission of wagering information the operation or participation in poker, chess, bridge, mahjong or any other game where success is predominantly determined by a player's skill.

June 7, 2007Rep. Jim McDermott (D-WA) introduces H.R. 2607, the Internet Gambling Tax Act to amend the Internal Revenue Code to establish licensing requirements and fees for Internet gambling operators, requiring Internet gambling operators to pay to the Director of the Financial Crimes.

Jul 9, 2007 iMEGA seeks Temporary Restraining Order (TRO) against enforcement of UIGEA

Sep 21, 2007 US govt. responds to iMEGA's TRO request

Oct 1, 2007 US officials propose rules for payment systems to implement UIGEA

April 2, 2008Congressional hearing on the proposed UIGEA regulations

June 25, 2008US House Financial Services Committee defeats bill HR 5767, ‘Payment Systems Protections Act’

August 1, 2008 Pete Sessions Introduces HR 6663 to Clarify UIGEA. As the name implies, the purpose of the Act is to clarify what is to be deemed legal or illegal under UIGEA.

September 11, 2008 Barney Frank Introduces HR 6870, the second version of the Payments System Protection Act. The first version, HR 5767, was rejected on June 25, 2008.

October 1, 2008 Senator Robert Menendez (D-N.J.) introduces S.B. 3616, the Internet Skill Games Licensing and Control Act of 2008, to regulate Internet poker sites.