Looking for holes in the bill

The first batch listed companies could be blamed for going public too soon and not considering the impact of legislation such as the Unlawful Internet Gambling Enforcement Act may have on their business.

It’s a sad fact that the likes of Partygaming and Cassava will have to adhere to the draconian measures put in place but smaller companies will find themselves in a unique position heralding back to the ‘good old days’.

Unlawful Internet Gambling Enforcement Act, would prohibit credit card companies and other payment providers from processing online gambling transactions.

Unlike the version of the Act that passed the House earlier this year, the approved legislation does not explicitly outlaw betting on online casino-style games, such as poker and blackjack. The bill does bar financial institutions from accepting ‘illegal’ bets, leaving questions unanswered as to whether some forms of online gambling are permitted. To date, sports betting is one of the only forms of gambling explicitly outlawed in the act.

If the bill becomes law, gamblers will still bet on these sites. But rather than using credit cards, they'll employ other e-wallet payment services based outside the U.S., such as NetTeller, FirePay and off shore banks. Frank Catania, former director of gaming enforcement in New Jersey and president of Catania Consulting Group, calls the law ‘a sham’ that won't stop online betting in the U.S.

“There are so many alternate means of payment that it is not going to stop what is happening here,” says Catania. "We are going to be spending a lot of money for enforcement, and it is going to be worthless." Enforcing the act will cost about $2 million between 2007 and 2011, according to a May 26 Congressional Budget Office report.

Editor, Jackpot.co.uk - 2006-10-04 13:04:07

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