It's Official - The UIGEA Has Been Postponed

November 29, 2009 | News Category: Gaming Law

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With the December 1st deadline for official implementation of the UIGEA (Unlawful Internet Gambling Enforcement Act) fast approaching, the online gambling world had been holding its collective breath hoping that the UIGEA would be delayed at the last minute. Last week, unofficial rumors which came out of the US Treasury Department and the Federal Reserve, regarding the delay of the UIGEA, have now been confirmed.

The official announcement was released on Friday, confirming that the UIGEA's implementation has been delayed for six months, and not the year that had been requested by Barney Frank and other Congressman. The delay has been met with positive reactions from Barney Frank and many other supporters of Internet freedom and legalized online gambling.

The new official UIGEA implementation date has been set for June 1st, 2010. This will give those opponents of the Act time to explore other legislative alternatives. At this time, much confusion has been caused by the vagueness of the UIGEA. Many financial institutions simply refused to process any transactions connected with online gambling since it was too difficult to distinguish which were allowed according to the UIGEA, and which were not. This caused both horse racing and lottery transactions to be turned down by the financial institutions. Many financial institutions chose to err on the side of caution so as not to find themselves in trouble with the law.

Kentucky lawmakers joined those who requested the delay, when they realized that many financial institutions were also blocking the online horse racing bets, which are legally allowed to be placed both online and offline. While Kentucky certainly does not approve of all online gambling, they definitely do not want horse race betting blocked by mistake. Horse racing and the revenue it generates are both very important to the state of Kentucky.

The original request to delay the UIGEA came from Barney Frank and 19 other Congressmen, although there were others that complained that there was too much vague language in the UIGEA.

"Commentators expressed concern that the Act and the final regulation do not provide a clear definition of 'unlawful Internet gambling,' which is central to compliance," said a statement from the federal authorities.

Providers of financial transactions will now have extra time to figure out exactly how they will cope with this unusual law. Many, however, are hoping that Barney Frank will be able to push through the online gambling bill, and the bill which calls for the abolishment of the UIGEA. Should either of these bills pass through Congress in the next six months, the UIGEA will simply become moot.