Gambling has always been a vibrant legal topic with a great deal of debate and controversy surrounding the legal status of real money online gambling in the US. Over the course of the past century, gambling has seen many transformations. Gambling has evolved from state and nationally sanctioned lotteries to the golden casinos of the 1990s. Eventually, gambling settled into its most modern form, which is internet gambling. With the current proliferation of internet gambling, the law is struggling to keep up. The stigma against gambling has certainly not faded, and therefore there are currently strong legal regulations in place. One of the current legal regulations is the Unlawful Internet Gambling Enforcement Act of 2006. Also known as "UIGEA," this act is a piece of legislation that works to regulate the financial side of real money online gambling for US players. Below is a thorough look at the UIGEA.

Overview of the UIGEA

The UIGEA was passed in 2006 in an effort to curtail illegal financial crimes that were being tied to the online gambling industry due to a lack of regulatory oversight being presesnt. Even then, the money laundering and fraud that were taking place were primarily limited to those sites that were not operating legally within the industry to start with. The law successfully placed regulatory restrictions on how gambling related transactions could be processes. Sadly, the law affected both legal and illigitmate gambling sites and definitely caused an industry stirring that was not favorable to US players, driving some high quality payment processors out of the market, as well as causing some issues with gambling related credit card transactions.

Since the time that this law was enacted, the dust has cleared and things have stabalized, with several legal US friendly payment methods remaining strong and working in compliance with regulatory requirements. One thing that the UIGEA has curtailed is US based online gambling opportunities. This is not really of much consequence to US players due to the number of legally licensed and regulated offshore gambling sites that are available for players in the United States. The UIGEA law does not make it illegal for US players to participate in legal, offshore online gambling. It is directed solely at gambling site operators and payment processors, and does not affect player activity.

How the UIGEA Affects Online Gambling Sites

Clearly, the language of the UIGEA affects many forms of online gambling. There are those that argue that the UIGEA should not pertain to real money poker sites. The reason behind this is that poker requires skill and is not a mere "bet." Unfortunately, this argument is not considered valid by lawmakers. In order to determine whether a contest is a game of skill or a game of chance, many U.S. jurisdictions utilize the "Dominant Factor" test. The Dominant Factor test analyzes whether chance or skill determines the outcome of an act. If an act is predominantly chance (51%), then it is betting. The application of this law may begin to change based on the fact that the DOJ has determined that each individual state can determine whether or not they want to allow legal state licensed online casino or poker gambling options to their residents. Due to the fact that US based online gambling is in its infancy, they are still working out how this law applies to these new industries and account funding. This law has no bearing on licensed and regulated online gambling sites located outside of the United States that accept US players.

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