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Will the UIGEA Bill Be Overturned?

The United States set themselves up for trouble with the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. Finally, the dominos are in place…hopefully all we have to do now is watch them fall.

Presently, there are many problems with the current legislation, and these flaws cannot be ignored by any citizen, company, or lawmaker. Laws are to be understood and enforced—both of which the UIGEA fails to accomplish.

The current legislation is written so that U.S. financial companies must interpret and enforce the laws themselves. Today, they are accountable to decipher what defines an illegal transaction at both the State and Federal levels, and also to forecast and monitor their customer’s intended activities. If the financial service companies conclude that the requested transaction is for gambling purposes, they are required to find solutions to uphold the law—usually by denying the transaction. In fear of breaking these ambiguous laws, their interpretations and solutions can sometimes lead to rejecting what would have been a legal operation. It isn’t their job to interpret and enforce the law and, therefore, should not be their responsibility.

This is just one of many weak joints in the signed UIGEA legislation, but countering bills are on the horizon.

The Internet Gambling Regulation and Enforcement Act was introduced by U.S. representative, Barney Frank, on April 26, 2007. This would enable licensed gambling companies in legal jurisdictions to accept business from U.S. citizens. This new legislation, if passed, will regulate the gambling industry by protecting it from underage gambling, fraud, identity theft, and money laundering. Furthermore, this bill does not discriminate against any type of gambling, otherwise known as games of skill or chance.

Accompanying this bill, on June 7, 2007, U.S. representative introduced the Internet Gambling Regulation and Tax Enforcement Act. If signed, this bill will require registered online gambling companies to pay two percent of players’ deposits. Customers will not be expected to pay any portion of these tax fees. This legislation should bring in 6-25 billion dollars for the U.S. in just the first five years.

In addition to these opposing bills, the lawsuit pending for the United States over violating international trade laws will be judged on December 14th by the World Trade Organization. If the ruling is against the U.S., they will be expected to pay up to 100 billion dollars to several trading partners.

The United States overstepped their boundaries in many ways by passing the UIGEA bill. They created a law that broke the law, and pawned enforcing responsibilities off to others of very different job descriptions. This is a perfect example of poor planning and bad judgment. This is also why this legislation will never stand up in court.

These bills proposing regulation and taxation have their pros and cons. It is a good bargaining method to bring online gambling back to legal and accessible status. One excuse the government made was that online gambling transactions are too difficult to regulate, and therefore the funds could be feeding the pockets of terrorists. Now they have no excuse. This new legislation will monitor and regulate online gambling activities, and will even rake in new revenue.

However, there is a negative side to the issue. The United States seems to be continuously losing businesses over seas because of their ever-increasing taxes. Will the 2% company tax deter online casino owners from signing a contract with the U.S.? Will there be more compromising in the future?

How can you help? Go to http://www.safeandsecureig.org and register your support for regulated internet gambling.

By Victoria Maro