Net Bet Blog

UIGEA supposedly had a carve out for betting making the entire big even more disgraceful that it already was pandering to powerful lobby groups at the expense of non-US gaming companies.

This article shows that the cosy carve out might not be so helpful after all.

In the future the banks may well have this lobby group squealing for UIGEA to be lifted.

No Sprint to Finish for Internet Gambling Ban [PokerAlliance]

To set the scene:

Back in 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which required banks and credit card companies to no longer process payments for illegal Internet gambling.

Horse racing, which is regulated under the Interstate Horse Racing Act, received a much-publicized exception.

But how to banks know which payments are for horseracing and which for other sports?

But if the rules put the onus on the credit card companies to determine which transactions are legal, banks and credit card companies say it could end up leaving them no choice but to cancel transactions for bets on horse racing, too, including the storied Derby at Churchill Downs.

There are however even wider implications for US Plc. The bottom line is that these regulations put the US further behind the technological frontier for internet payments, gaming and internet commerce in general. It was simply badly conceived and executed.

Not only could banks and credit card companies put the skids on Internet horse-racing bets, Abernathy said some of those companies, in an abundance of caution, might even cancel payments to casinos for such benign items as T-shirts.

The problem of overblocking is a very real one when criminal cases are at stake.

Other financial services lobbyists say their companies might err on the side of caution. "A lot of institutions would do what's called ‘overblocking' to be on the safe side," said Leigh Williams of the Financial Services Roundtable. "It's quite possible that we would, in fact, go beyond the letter of the law."

This should get the horse racing industry very worried.

"Now, the reason I think it's concerning, from a legal perspective, is that if and when they ever adopt the Unlawful Internet Gambling Enforcement Act, banks, in my opinion, will always tend to take the more conservative position, and assume it's an unlawful transaction."

Cabot said that if that were to happen it would mean a potential disaster for the industry. "You would have a situation where the horse-racing industry is going to have a hard time surviving," he said.

It will be interesting to see how this pans out. The poker lobby group pokeralliance have increasing financial muscle and are lobbying hard.

There is a long way to go yet in the regulation game and all the while US players continue to gamble in their millions on riskier sites than necessary.

Will they ever learn.

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