By Samantha Williams

Protectionism. Violation of trade agreements. Curtailing of freedom of choice.  These are all heavy handed words to throw about, but these words are exactly the things that the United States federal government has been accused of since the infamous UIGEA was signed into law.  Rather than do something good for everyone concerned, it seems that UIGEA has done more than its share of harm.

One only has to look at the trade in service violations compensation filed by the European Union – with all of its 27 member states – along with China, Mexico, Japan, Australia, Costa Rica, Canada and India.  These claims alone can cost the United States government some $100 B.  The US may have gotten away with getting slapped by the World Trade Organization with a mere $21 M in annual fines to Antigua and Barbuda instead of $3.4 B.  Nonetheless, when Antigua and Barbados stops enforcing US copyright and intellectual property rights in their jurisdiction as part of the WTO deal, it will still hurt a lot for the US. 

Nobody disagrees with the fact that UIGEA is a half-baked law at best.  It is based on outmoded ideas and is full of loopholes.  There is also no way to implement this law properly.  The Bank of America has already come forward and stated that executing measures that will make its procedures comply with UIGEA will result in unnecessary delays and added costs for their clients’ transactions.  To sort transactions that are deemed illegal – paid to and received from online gambling companies – from transactions that are legitimate will only lead to delays, especially for clients whose transactions are legitimate in the first place.

One also cannot deny a sniff of hypocrisy surrounding UIGEA.  It is illegal for offshore online gaming sites to accept bets from American players, but that does not mean that it is illegal for American players to place bets on online gaming sites.  It is especially not illegal to place these bets on domestic online gaming companies.  No wonder the members of the European Union are crying foul in this situation. 

If it is a matter of losing huge amounts of taxable income for the US federal government, the government should just have come forward and said so, and instead implemented measures that will regulate the online gaming industry instead of choking it, instead of passing this vague, nonsensical law called UIGEA.  In this way, everybody wins.  Patrons of online gaming sites will get whatever fun they want from these websites without feeling like they are being told what they should and should not do.  Companies moving within the gaming industry will get to be happy doing business with American players.  The US federal government will get the tax money that it craves to squeeze from the industry.  Taxation required or not, everybody is still happy.

Thankfully, there are a number of bills in Congress that are seeking to impose exemptions to the UIGEA, including one that seeks to exclude skill games like poker, backgammon, chess and mahjong from being covered by UIGEA.  We can all still look forward to some good news in the future and hope that what needs to be learned from the UIGEA experience will be remembered.