The UIGEA FAQ
What is the UIGEA?
On September 30, 2006, the Unlawful Internet
Gambling Enforcement Act (UIGEA) received a final vote of passage in the
U.S. Senate and soon after was signed into law by President George W.
Bush. This was the culmination of over a decade of attempts, lead by
Senator John Kyl [R-AZ], Senator Bill Frist [R-TN], Congressman Jim Leach
[R-Iowa] and Congressman Robert Goodlatte [R-VA], backed by the Religious Right,
to make Internet gambling, and Internet poker, unlawful under U.S. federal law.
The UIGEA makes it illegal for any person or enterprises in the
business of Internet gambling to accept money transfers for the purpose of
"unlawful Internet gambling". Although the UIGEA and the related Treasury
regulations do not actually make any Internet gambling illegal, they do give
the U.S. Department of Justice additional tools to seize funds and indict
companies related to Internet gambling and Internet poker.
Does the UIGEA make playing Internet poker illegal?
No, the UIGEA does not make it illegal to play Internet poker. Nor does it make any Internet gambling illegal. It only makes it illegal for a business to accept any sort of money transfer from the U.S. for the purpose of “unlawful Internet gambling”. However, the UIGEA does not itself define what is unlawful but rather relies on existing federal, state and local laws to determine if the player who transfers the money is making Internet bets or wagers that are unlawful in the jurisdiction where
the player is located.
Do any other federal laws making playing Internet poker illegal?
It depends on who you ask. The Wire Act does make it illegal to run an Internet business which accepts bets or wagers “on any sporting event or contest”. In 2001, the U.S. Fifth Circuit Court of Appeals [In re MasterCard Int'l, et al., 132 F. Supp. 2d 468, 472 (E.D. La. 2001)] ruled that
the Wire Act is limited to sports
betting. The Department of Justice did not accept this ruling, claiming that they were not a party to the court action, and
takes the position that all Internet betting (including poker) by anyone in the U.S. is illegal and all businesses that provide Internet betting facilities to U.S. players are breaking U.S. federal law.
How does the UIGEA affect banks?
The UIGEA mandates that banks and other financial service providers must do “due diligence” to ensure compliance with the
UIGEA regulations including:
* adopt a UIGEA compliance policy;
* develop a due diligence process at account opening to determine whether a commercial customer presents anything more than a minimal risk of engaging in Internet gambling;
* provide notice to existing commercial customers;
* obtain any necessary notice of compliance from a designated payment system (debit/credit cards);
* develop procedures for responding when the bank becomes aware of restricted transactions.
Banks are not required to have written policies and procedures to block ACH, check, or wire payments related to Internet gambling. However, they are liable to penalties for non-compliance and also cannot be penalized or sued for incorrectly blocking legal transactions in an effort to comply with the UIGEA. Therefore, overblocking by banks is not unusual, and some banks may block any transaction related in any way to Internet poker. They may also close all the accounts of a banking customer, personal or business, if they detect any Internet poker-related transactions.
Here is all the info about compliance with the UIGEA from the American Banking Association. Most of the documents are restricted to members only, but these few can be viewed by anyone (pdf files):
•Compliance Overview (5/28/09)
•Four Keys to UIGEA Compliance
•Compliance Overview (5/28/09)
More about ACH
transactions.
Will implementation of the UIGEA prevent me from making deposits and withdrawals on the poker sites?
Financial institutions can be penalized for non-compliance, however, the regulations of the UIGEA do not require financial institutions to detect and block transactions related to unlawful Internet gambling, but rather to detect commercial accounts which accept such transactions and take appropriate actions to stop them, by either warnings or account closure.
The real threat of the UIGEA is the actions of the DOJ against payment processors and sites. The DOJ will continue to seize financial accounts belonging to payment processors and sites involved in Internet poker (and Internet gambling) where possible, and continue to bring indictments against them. Although the sites continue to provide deposit and withdrawal methods for U.S. players, and quickly restore any seized funds belonging to players, the sites may eventually find that it is too difficult and too costly to continue to offer play to U.S. players.
Also, banks are liable to penalties for non-compliance and also cannot be penalized or sued for incorrectly blocking legal transactions in an effort to comply with the UIGEA. Therefore, overblocking by banks is not unusual, and some banks may block any transaction related in any way to Internet poker. The worst that can happen is that the bank will return your account monies to you and close your account. For this reason, it is a good idea to have a bank account specifically for your poker transactions at a separate bank from your regular banking.
Why are some players complaining about troubles with poker transactions at their bank?
1. Paranoia
Some players are worried about depositing their cashout checks, especially in the aftermath of recent DOJ funds seizures. This leads some players to be paranoid at simple things like a teller saying "that's an unusual looking check", which was just a conversational comment by the teller but taken by the player to be some sort of inquisition. To avoid such face-to-face situations, players can simply use an ATM to deposit cashout checks. Using an ATM for deposits doesn't trigger any red flags at a bank.
2. Suspicious Transactions
Banks are required to file a Suspicious Activity Report (SAR) on any transactions which seems suspicious, i.e. possibly related to illegal activities. Note that it is not illegal under the UIGEA for a player to receive a cashout payment for "internet gambling". (Nor is it illegal under the UIGEA for the site to send a cashout to a player.) However, some players, in an effort to avoid detection, will structure their payouts into multiple bank wires. For a bank, it is much more suspicious to see multiple foreign wires of smaller amounts come into an account in a short period of time than to receive one large foreign bank wire, as it looks like the depositor is trying to hide something. This is the most likely reason that a bank calls up a player to inquire as to the nature of the bank wires. Don't structure your payouts that way.
3. Misinformed Bank Employees
It is not part of the UIGEA regulations, nor proper bank procedures related to the UIGEA, for bank employees to try to detect player transactions related to "online gambling". However, some bank employees and perhaps some bank policies may be misguided in this respect, and therefore may give the player trouble. Under the UIGEA, banks cannot be penalized or sued for blocking transactions that are not restricted, so they are free to overblock. The worst that can happen is that the bank will return your account monies to you and close your account. For this reason, it's a good idea to have a bank account specifically for your poker transactions at a separate bank from your regular banking. Using a small neighborhood bank or a credit union for this purpose is recommended as there are less bank personnel with idle hands.
Overall, the UIGEA regulations should have minimal impact on players. The main difficulties will be for the sites to be able to maintain banking relationships with financial institutions and the much greater risk for the sites of DOJ interference (seizures and indictments) with their operations. This will in time translate to more difficult transactions for the players.
Will implementation of the UIGEA stop Internet poker for U.S. players?
Only time will tell. Although federal law does not make Internet poker illegal for either the player or the sites, the DOJ continues to take actions against Internet poker sites through seizure of funds and indictments of payment processors. However, these DOJ actions are designed in such a way to avoid any actual court trials which gives no opportunity for the interested parties to legally challenge the actions of the DOJ or their application of the laws in U.S. federal court.
In the meantime, the sites have to replace seized funds out of their own pockets, and regularly change their financial processor accounts to avoid detection.
Over time, the sites will likely find it harder and harder to find ways to process transactions. In addition, there are many casual players who have stopped playing Internet poker or won’t open a new account as they now believe it is illegal due to the UIGEA, or they find the deposits and withdrawals too risky or troublesome.
All of this translates to more expenses and less profits for the Internet poker sites. Eventually a threshold might be reached where the sites find it is too costly or too risky to continue to offer Internet poker to U.S. players, and they decide to cashout all U.S. players and close their U.S.-facing business.
What deposit and withdrawal methods are still available to me?
The answer to this question changes regularly and depends on the site. The sites are still able to offer deposits and withdrawals by check, money order and bank wire. Some also currently have options for electronic funds transfers (echecks) and money transfers (Western Union,
MoneyGram). Most credit/debit cards no longer work. (Check with your site before you attempt to use a credit card to make sure that you won’t be charged a cash advance fee.) Visit the cashier at your site to see which options are available to you. Note that each site have minimum and maximum deposit limits for the various methods. There may also be fees for some of the withdrawal methods, depending on your site.
What do I say if my bank asks about my cashout deposit?
Don’t lie. The worst they can do is return your monies and close your
account. Most likely they aren’t trying to find out if the deposit is from Internet poker, but rather are looking for other types of suspicious activity. You can say something unspecific such as you have an online business or you are being paid for some online work. If they press for more information, you can refuse to answer and, if necessary, take your business elsewhere.
What do I say if my bank or credit card company asks about my credit card usage or puts a security hold on it?
Most likely they are just concerned that your credit card isn’t being used by someone who has stolen your card number. When you use your credit card to make a deposit to a poker site, the transaction may be blocked (based on the credit card coding system), or the transaction may get flagged as unusual as it doesn’t fit your ordinary purchasing patterns. In either case, the fraud department of your bank or your credit card company may put a hold on your credit card and try to contact you to verify that you initiated the transaction. Once you verify the transaction as yours, they will remove the hold and you can start using your card again. Do not tell them that you were making an Internet poker deposit; just verify that you were making an Internet purchase.
Can I deposit my poker site cashout check if it shows a foreign bank name and address?
If the check has an ABA routing 9-digit number followed by the bank account number imprinted along the bottom [MICR
encoding] it can be deposited in your bank account without the need for it to be sent for collection. Checks in US$ issued by a foreign bank are usually written on either their U.S. branch or a U.S. corresponding bank. As long as it has those numbers imprinted on the bottom, the check can be deposited without any collection procedures or fees required even if the bank name and address printed at the top of check is foreign. Sometimes a teller will not be well trained and will assume that a check written on a foreign bank needs to be sent for collection, even when it has the imprinted information. To avoid this problem, it is best to deposit such checks through an ATM.
More info on ABA numbers:
http://en.wikipedia.org/wiki/Routing_transit_number
What can I do to help keep Internet poker available in the U.S.?
Send the Poker Players Alliance (PPA) letters to your lawmakers:
http://capwiz.com/pokerplayersalliance/home/
Become a member of the PPA:
https://theppa.org/join/
Donate to the PokerPAC:
http://theppa.org/about/pokerpac/donations/
Volunteer to help the PPA in your state:
http://theppa.org/volunteer/
Send this e-mail letter to your friends, family and co-workers:
Dear _________,
Please take a few moments to help me and fellow American poker players fight for our right to play Internet poker. Although it is currently still legal in most of the U.S. for anyone to play poker online, the current policy of our federal government is to interfere with our access to the sites and to attempt to block all related financial transactions.
Please help us lobby our federal and state government leaders and representatives to pass legislation to license and regulate Internet poker so all U.S. citizens will have unhindered access to the sites, as well as needed consumer protections. By using the links below, you can send pre-formatted e-mail letters through the Poker Players Alliance. It should take you only a minute or less for each of the three forms, and only requires that you enter your name, address, e-mail and phone (enter 999-999-9999 if you don't want to
give out your real one).
To send a letter to your federal and state lawmakers:
http://capwiz.com/pokerplayersalliance/home/
Thanks so much!
Best,
[your name]
P.S. Please forward this message to your friends and family too.
