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FEW CLEAR UIGEA PROHIBITIONS

Despite the fact that the UIGEA as a statute is vague and that the Act could be interpreted in different ways there are some clear prohibitions. In order to establish a violation of the UIGEA you must prove
  1. A “person”1 was engaged in the business of betting and wagering;
  2. That person knowingly accepted a financial instrument or proceeds thereof; and
  3. That instrument was accepted (by the person) in connection with the participation of another person in “unlawful Internet gambling”.
 
Describing Unlawful Internet Gambling
Furthermore it is important to mention that the statute “unlawful Internet gambling” is defined as follows:
 
To place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the state or tribal lands in which the bet or wager is initiated, received, or otherwise made.2
 
To put it in a nutshell this means that the UIGEA only applies where state, federal or tribe laws prohibit online gambling. Californian card rooms are legal and governed by the state. The UIGEA does not prevent the state of California from making a poker room “California State Poker” or from allowing transactions to such a poker room thereby facilitating online poker for the residents of California. In other states like the state of Washington playing poker online is a felony3 hence the UIGEA applies for residents of the state of Washington and companies dealing with residents from there.
 
To sum up, the UIGEA was passed by the Senate and signed by George Bush on the 13th of October 2006. It is a federal law which only applies if similar prohibitions are present by federal, state or tribe law. This means that the UIGEA only applies to gambling transactions that are prohibited by a specific state. The act of placing a bet in online poker is not prohibited by federal law.4
 
It is obvious that the companies still involved in online gambling and its transactions in the US would argue in their defence that they are not violating any state law and that they are not involved in “Unlawful Internet Gambling” as long as they stay clear of sports betting, players from specific states, and do not get their hands dirty by being involved in luring banks into accepting gambling transaction disguised as something else.

 


1 This includes an individual or a company.
2 18 USC §5362 (10) 
Seattlepi September 22, 2010 
4 Lawrence G. Walters, GamblingLawUpdate, Breaking Down the UIGEA, page 11 (page removed)