The UIGEA. For anyone that has had their head in the sand for the past few years this is the Unlawful Internet Gambling Enforcement Act passed early 2007 and which will finally come into effect on January 19th.This is being done in the final hour before the signing in of a new government. The midnight rulemaking allows for finalising and implementing regulations which do not take effect for 60 days. Thus finalise it now and it will be in place for the new gov't.
What does this mean to the poker player. The UIGEA states that it will be illegal to make any cash movements in or out of 'unlawful' gambling sites. The 'Act' has been very vague in specifiy what these sites will consist of so we can assume the Fed and the banks will be over cautious and engage in "overblocking". Stopping ALL suspect transactions. This has other implications as you can imagine. This is also a huge burden for the financial system.
I see a few things happening, and these are just my thoughts, right or wrong so dont flame me for thinking out loud.
Firstly, the worry about safe funds will be priority. I see US players cashing out of sites from now and Jan 19th. There could be a huge increase in outflows from the main US sites. To cash out after this will mean risk of losing your cash. The sites cannot wire transfer and any cheque sent could be refused by your bank.
With the money being sucked out of the system there could be less play for a while. Im sure there will be other ways around it using 3rd party offshore payment vehicles eg Neteller but this is still risky and the casual player will not go to such efforts to deposit onto the sites. Bad news for renewable fish levels.
As an upside thought this could create an increase in reload bonuses from the sites. If a site needs to raise cash then offer a regular deposit bounus. I see Absolute Poker offer around 8 reload bonuses a month at the moment. These are reload bonuses not first deposit bonuses.
I think for the first few months there will be a lot of bad players online. The good players would have pulled most of their cash out and the bad players wouldnt have noticed the law had finalised. They will have stuck funds and will donk them off. After a while the good players will have the cash and the fish will not deposit.
This is all bad news for the US player base, the majority of online play. It maybe that the sites will shift their focus to Europe and Asia where there is no legislation stopping us play. We may see more tournaments schedules appearing in the European time zone etc. It may mean that some sites will stop accepting US customers.
The bottom line though this is a big negative impact on the poker landscape. Lets cross our fingers and hope that Mr Obama will come in and as per the Congressional Review Act 1996, reverse these last minute regulations. This is possible as the act states that any act finalised in the previous 60 days are legally considered to have taken place on the 15th day of the next congress.
Anyone have any more thoughts on this ?
[UIGEA] Treasury, Fed Issue Final Rule on Unlawful Internet Gambling (11/12/08)
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