The UIGEA Looms

The deadline for the future of online gambling in the United States is nearly upon us. The Unlawful Internet Gambling Enforcement Act, otherwise known as the UIGEA, is set to take effect on 1 June.  However, there is a group of people, led by Republicans Barney Frank and Jim McDermott, lobbying strongly for it to be repealed.  Their proposal would see the legalisation and taxation of online gambling.

McDermott makes the point that many Americans are currently gambling online yet the country and lawmakers are turning a blind eye to it.

Under their bill, a tax of 6 per cent would be levied on all deposits and paid to the state or tribal government where the player is a resident. Plus the federal government would benefit from an additional 2 per cent of all deposits. The congressional Joint Committee on Taxation has estimated that such a plan would generated a staggering $30 billion in revenue for states and tribal governments and a further $42 billion for the federal government over the next decade.

McDermott argues that this source of money is too valuable and desperately needed for communities in today's economy to be ignored.  He has also put forward the argument that adults ought to have the right to do as they please with their own money without interference from the government.

Professional sports leagues, however, are opposed to the bill as they believe it will increase wagers placed on their matches. They are joined in their opposition by a number of Christian charity organisations.

The bill was due to be considered in the House Financial Services Committee late last week, however, was cancelled. A vote is now due in spring and all online casinos - and some not yet invented - are watching developments closely hoping to tap into a new and huge source of revenue.

Under the UIGEA, banks will be responsible for monitoring all credit card transactions to catch players who play at offshore sites.