It's been two years since the UIGEA was passed. This was a law that significantly impacted my life because I used to sell advertising to Internet gambling sites through LasVegasAdvisor.com and affiliated Web sites.

While the law was not implemented immediately upon President Bush's signature, certain online sites, such as the mothers of all online sites PartyPoker.com and 888.com (also called CasinoOnNet), stopped taking USA clients and therefore stopped advertising in the USA market. Also, NeTeller, a major money transfer option, froze its USA-facing business cutting off a major artery of cashflow between US residents and the online sites.

Some businesses, such as Bodog (now BodogLife), Poker Stars, and Full Tilt Poker, decided to continue to do business in the USA and flourished as a result of the major competition going away. These companies were private companies and not public like Party and 888 and so had more flexibility in continuing their business.

When I say above that the law was not implemented immediately, what I mean is that the original statute provided for a 270 day period for the Treasury Department, Justice Department, and Federal Reserve to come up with firm regulations, restrictions, and ways to implement the law. The passage of the law initially was enough to deter the public online gambling operators, but there was to be no actual change for up to 270 days.

Instead of 270 days, it actually took over 600 days but now we see how our government is going to enforce this law. Well, sort of. They're passing the buck to the banks. The banks are supposed to monitor every transaction (meaning every single transaction; meaning the billions of transactions that happen all the time, of which perhaps one-ten-thousandth of 1% are Internet gambling related) to determine if it is a financial transfer between a USA resident and an "illegal" gambling site.

The banks don't want the burden. They've lobbied against this bill and some say that it will cost billions of dollars in creating the technology to enforce this while also costing a million hours of work.

Interesting that we're now embroiled in an enormous bank bailout in which banks are suffering everywhere and we're piling more on their plate. ( and in the name of what? morality?)

At the bottom of this article, I'm going to link to an article by I. Nelson Rose who's a gambling-expert attorney who's written his take on the new implementation of the UIGEA. I believe that Professor Rose is certainly of the libertarian viewpoint when it comes to gambling, and it shows in some of his derision for what he sees as the ridiculousness of the law. Having said that, he's an expert and can break down a lot of the legalese for people like you and me.

Some people think Obama could reverse it. Rose says in his article that maybe he can and maybe he can't. I'm a legal nobody but I don't think he can. It was a law passed by Congress and signed by President Bush. It wasn't an Executive Order. I think it would take Congress to overturn this as well as Obama to sign the new law. I also am not sure that Obama would want to permit Internet gambling or whether it will even be an issue he'd want to tackle.

In other words, I don't see any changes for a while.

Professor Rose's take is that with the new implementation, very little changes. The banks get hit with more hassles to deal with, but it won't affect those Americans playing poker online. (There aren't REALLY Americans playing poker online are there? )

Let me just pass along his article to you and let you be the judge. I'd welcome your comments here to the blog. A little more interaction with the readers could help it grow.

The New UIGEA: Nothing Changes by I. Nelson Rose