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 enterprise 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 they are 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:
http://www.nacha.org/ACH_Rules/ACH%2...12,%202009.pdf

Will implementation of the UIGEA prevent me from making deposits and withdrawals on the poker sites?

The final compliance date for the UIGEA is December 1, 2009. Starting on that date, 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 the 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 direct effect of the December 1, 2009 deadline for implementation of 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. Also, the media coverage of the implementation of the UIGEA and any related DOJ actions will further squash the interest of casual players to open or maintain any online poker accounts.

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. As the full implementation of the UIGEA goes into effect, 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). Some credit/debit cards work; many don’t. (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

Simple practical advice:

As a basic practical matter, while no one knows just how much things are going to change, even the most optimistic of the experts expect the ability to move money will get at least somewhat worse after 12/1/09. But even the most pessimistic experts do not expect things to stop completely; there will always be some way to get your money and the bigger sites will always honor those commitments. It will just get more inconvenient to one degree or another.

Accordingly, the ones who really should worry and do something in advance of 12/1/09 are those grinders who need a regular withdrawal to keep up with their bills. I do believe that includes many who post on 2+2, though far from all.

You folks who rely on steady withdrawals need to make contingency plans. No one can predict just how much more difficult moving money is going to become after 12/1, just that it will get more difficult to one degree or another. So relying on an ability to get regular and swift withdrawals is dangerous. Make adjustments to your situation so that you will not suffer if you find yourself having to go a few weeks without withdrawing at some time.

Similarly, those casual players who make frequent deposits might want to consider loading a little extra between now and 12/1. Again this is not because you are likely to become completely unable to deposit or play, only that you may well find yourself having to go through periods of not being able to deposit before an option becomes available to you again.

And for those who really like playing it safe, have 2 bank accounts and only use one for poker money. Some banks will discover poker play, and some of those banks will have a policy of simply closing any account used for "gambling." If you are unlucky enough to find yourself in that still relatively rare circumstance, you want to have another account to use for personal finances while waiting to create a new account for poker.


What effect would a delay of the UIGEA implementation date have?

Representative Barney Frank introduced a bill to Congress earlier this year to delay the final implementation date of the UIGEA by one year, to December 1, 2010. He also recently submitted a bipartisan letter, signed by nineteen Congressmen in all, to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking them to delay implementation of the UIGEA. Also, the Poker Player’s Alliance along with the National Thoroughbred Racing Association and the American Greyhound Track Operators Association submitted a petition for rulemaking to Geithner and Bernanke for the same purpose.

If a delay is granted, the provisions of the UIGEA will remain in effect but compliance with the regulations by financial institutions will not be required and cannot be enforced for another year. In practical terms, there will be less likelihood that banks will block transactions or close accounts.

More importantly, an extension of the implementation date would be a signal that the current administration takes the Barney Frank bill for federal licensing and regulation of Internet gambling seriously. The delay would gave Frank a chance to move the bill through Congress and to the floor for a vote before full implementation of the UIGEA. The delay would lend credence to the licensing bill as a valid and likely piece of legislation.

What can I do to help keep Internet poker available in the U.S.?

Send the 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 letter to your friends, family and co-workers:

Great job, looks very complete. Definitely worthy of stickying.

+1

I'll sticky it in the PPA forum after it's run its course here (which may be a while -- it should be a hot topic).

Definitely. Many bank tellers simply wish to be friendly and make polite conversation. That's just good customer service. Anyone unprepared for this should definitely avail themselves of the ATM.

Question:

If the sites pull out of the US due to the costly "flip flopping" of the payment processors, are US players gaurenteed to get their funds deposited back into their banks without interrpution?
Or is there a chance that there could be total seizure of the funds since the money has essentially been tracked to offshore gambling sites and for some reason not be allowed back to the player's account?

The major sites would, I believe, refund all U.S. player account money if they left the U.S. market. They do have a worldwide clientele and a reputation to maintain. On the other hand, if something suddenly happened to them, through DOJ action for example, that shut them down completely, players, including their non-U.S. accounts, may have trouble retreiving their money. The chance of this is slim, but not out of the question. Some smaller sites with little foreign clientele could possibly just close their doors without reimbursement of player accounts.

This question also brings up an important point about federal licensing and regulation of the sites. Players in the U.S. have no recourse through the courts or any U.S. governmental agency if they are bilked or defrauded by a site. This would change if federal licensing and regulation is passed and implemented.

I guess my question was more in regards to the DOJ not allowing payment from the sites to the player's account once the site has pulled out of the US.

For example I trust the major sites would do all they can to cut players a check/wire/ext if they pulled out of the US, I guess my question is could the DOJ ever get to the point were they have sucessfuly blocked off all withdrawal methods from sites that prevents the site from trying to get the money to the player?

I guess a more simple question is asking if the DOJ could ever prevent the transfer of funds completely depsite the sites dedication to pay their players?

IMO the answer(or guess) to your question is highly based on circumstances/conditions which lead to the sites decision to pull out of the US...

IMO if the sites pull out because of effective and consistant DOJ pressure , fund seizure and/or indictments and arresteds at some point in time some(not all) player are going to be left holding the bag..Then I feel the players will have to pursue there $$$$ with the DOJ similar to what is happeneing IIRC with the fund seized in the Bet on case...

OTOH if it's because of additional Laws and/or court decisions IMO ALL player will quickly be able to get there $$$$ from the major sites and the DOJ will not interupt the payments...

No, not validly under the UIGEA alone. The UIGEA specifically does not forbid payment by the sites to players. I think the sites would find a way to make final payouts if it ever comes to that.

Here is an addition to the FAQ:

What effect would a delay of the UIGEA implementation date have?

Representative Barney Frank introduced a bill to Congress earlier this year to delay the final implementation date of the UIGEA by one year, to December 1, 2010. He also recently submitted a bipartisan letter, signed by nineteen Congressmen in all, to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking them to delay implementation of the UIGEA. Also, the Poker Player’s Alliance along with the National Thoroughbred Racing Association and the American Greyhound Track Operators Association submitted a petition for rulemaking to Geithner and Bernanke for the same purpose.

If a delay is granted, the provisions of the UIGEA will remain in effect but compliance with the regulations by financial institutions will not be required and cannot be enforced for another year. In practical terms, there will be less likelihood that banks will block transactions or close accounts.

More importantly, an extension of the implementation date would be a signal that the current administration takes the Barney Frank bill for federal licensing and regulation of Internet gambling seriously. The delay would gave Frank a chance to move the bill through Congress and to the floor for a vote before full implementation of the UIGEA. The delay would lend credence to the licensing bill as a valid and likely piece of legislation.

What can I do to help keep Internet poker available in the U.S.?

Send the 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 letter to your friends, family and co-workers:

PX great post as always.

Question: If in your estimation, the only threat of the UIGEA comes from the blocking of commercial transactions, then why can this not be entirely overcome by the use of foreign processors similar to what the big online sports books are currently doing?

Also, in your estimation,is the entire idea that deposits from fish will somehow be blocked (VISA echeck etc.) not a legitimate threat to online poker?

Thanks in advance

I don't think the only threat comes from blocking of commercial transactions. These are the threats I see from the UIGEA:

1. Sites will find it harder to maintain banking relationships with U.S.-facing/serving financial transaction providers.

2. Players will find it more difficult to do deposits and withdrawals.

3. Many banks will do their best to block all Internet poker (and Internet gambling) transactions, even though this is not a requirement under the UIGEA regulations.

4. There will be a lot more stories from players who have their transactions denied and/or their bank accounts closed.

5. The DOJ will use the UIGEA more aggressively as part of their arsenal against Internet poker sites and payment processors, including more seizures and indictments.

6. There will be some national media coverage of the full implementation date of the UIGEA and of any DOJ actions, making the general public belief that Internet poker is illegal more widespread.

7. The DOJ will also newly be able to inform banks not to process any transactions from specific business account numbers or specific payment processors whom they believe to be processing poker site transactions, without the need to do a multi-year investigation first like they have to do before they can get a seizure warrant. The UIGEA removes all due process from this account blacklisting.

8. There will be less casual players and new accounts from the U.S. as they are turned off from playing by the above.

All of these will take place. The severity of each of them is the only question. It may be light or it may be extreme. A lot depends on how aggressive the governmental agencies under the current administration are in their actions to shut down Internet poker and Internet gambling.

It's not a matter that some deposits from fish will be blocked. It's more a matter of #2, #4 and #6 causing #8. For many U.S.-facing sites, this would also mean a loss of regular players as their player base weakens and the poker action diminishes. If it's severe enough, I think all the U.S.-facing sites other than PokerStars and Full Tilt Poker could reach the point where they no longer maintain enough of an active player base to stay in business. This is worst-case scenario and it may never even get close to this. PS and FTP will probably never close their U.S.-facing business unless #5 makes it unprofitable or too risky, or they become faced with a choice between closing their U.S. accounts now and getting a U.S. license later.

Top post as always.

Good, practical post. Link below is bad, or is it me?

Here is correct link:

MOD - Please correct link in OP when you get a chance.

Here is one more addition to the FAQ, to go at the top (MOD - please add this to the top of the OP, and add my other addition a few posts up to the bottom):

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 enterprise 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.

Got it.

As P.X. has stated. Its NOT so much what the banks can and will do with the UIEGA, but how the DOJ and the SDNY will use it.

I think banks are probably 80-85% "implemented" when it comes the UIEGA, and we will hear of a slight to moderate increase in "Bank Account closures".

The DOJ and SDNY will use the UIEGA like the FBI & DOJ did with RICO Act. Like P.X. said, no red tape, no due process. This is what concerns me, when it comes to the payment processors, they will be able to seize them easier. Not that Government agencies have anything better to investigate: endlessly rampant fraud on Wall Street, terrorist attacks on military bases.

But what else should we expect from a morally and financially bankrupt goverment?


http://thebsreport.files.wordpress.c..._uncle_sam.jpg

Welcome the the U.S.S.A.......The United Socialist States of America

Why do you think that? I keep hearing of more and more account closures and DoJ seizures. Sorry, but from here it seems Obama and the DoJ have decided to go after us.

Two separate but related issues, IMO. Im not convinced that a UIGEA delay will stop the attack on processors. The UIGEA can do nothing but exacerbate things though.

IMO, the DoJ saw the passage of UIGEA as their Congressional marching orders to go after us with all the tools at their disposal. After all, their job is not to create the law, but to enforce it. A delay at least sends a message to everyone to slow down. It also helps sites because they need just one gateway into the U.S. financial system.

The DOJ is not citing the UIGEA in most if not all of their seizures, so I don't think your point holds.

This is why even if we get a delay in UIGEA IMO it wont stop the DOJ. They don't need UIGEA to go after the sites or atleast haven't so far.

TE do you really think that the slow turning wheels of the legislative branch will be able to turn out a delay bill in the next 21 days?