A Word on the UIGEA

There is a lot of confusion about online gambling in the United States. Many people think that it is illegal. Some think that some games are illegal while others are not. Allow me to clear that up the best that I can.

First of all, there is no federal ban on online gambling in the United States. There are 4 states that expressly prohibit online gambling. For the rest, it is either legal or kind of murky, with the legislative and judicial branches of government working on finding a solution to the legality question.  Many people think that online gambling is banned by the Unlawful Internet Gambling Enforcement Act (UIGEA). That is not the case.

As the courts have ruled, the UIGEA does not ban online gambling. All it does is allow for the punishment of those who engage in illegal online gambling. Nowhere, however, does it say what would be considered illegal. The UIGEA is an amendment added on to the end of the SAFE Port Act of 2006 (which has nothing to do with gambling). UIGEA does not deal with the gamblers at all. It only regards the financial institutions that pay out money from online gambling. If they pay out funds from “unlawful internet gambling,” then the funds can be seized and the institution can be punished under law. UIGEA can do nothing to someone who plays a game online, even if the activity were to be deemed “illegal.”

Not only that, but most people do not know that UIGEA is not currently in effect. It was passed in 2006, but it was not scheduled to take effect until December 1, 2009. As that deadline approached, lawmakers sought an extension because they thought the middle of an economic crisis was a bad time to be placing more burdens on the financial industry. The Fed and Department of Justice agreed and delayed implementation of the restrictions from UIGEA.

So if you are an online gambler in the United States, let me say this very clearly, there is no federal law making that activity illegal. Make sure your particular state does not ban it and if not, you are committing no crime.

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