Online poker players will soon find it a lot more difficult to get their gambling fix. On Tuesday, the Unlawful Internet Gambling Enforcement Act (UIGEA) will go into effect, prohibiting financial institutions from transferring funds to so-called "unlawful Internet gambling" sites. The controversial regulation, which rode through on the coattails of the SAFE Port Act, in 2006, is vaguely worded and puts the onus on banks to recognize where their payments are going.
Even as the UIGEA hovers, legislation is being proposed that will legalize and regulate online poker, which has become a multi-billion-dollar industry. According to companion bills proposed by Barney Frank (D., Massachusetts) and Jim McDermott (D., Washington), the federal government would receive $42 billion in taxes over the next 10 years via legalized online poker. Under McDermott's bill, various states could choose not to participate in the legalization, but they would lose out on tax revenues generated by the game.
While those bills hang, it appears that the UIGEA, which was already postponed once, will take effect. What that means for online poker players remains unclear. "It may become more inconvenient to deposit money [with online poker sites]," says John Pappas, executive director of Poker Player's Alliance, a nonprofit organization. "Right now you can use a debit card or a wire transfer or an e-wallet."
If the UIGEA makes it arduous to deposit money into online poker accounts, there will be fewer losing players buying into the games. That, of course, would make online poker less profitable for pros and successful amateurs. However, Pappas remains optimistic that "new payment methods will emerge" before the game itself is completely legalized. And he anticipates that happening in the near future.
"It's not a question of if it will be legalized; it's a question of when," he says. "We are working toward having something done this year. Opponents are becoming neutralized or marginalized and we are gaining more supporters."
Take the first steps to building your portfolio.View Course »