UIGEA Explained

One of the most important and overlooked aspects of being able to safely enjoy placing bets or wagers on sporting events or playing games of skill online is ensuring that you are playing in a way that abides by the law. Ensuring that you are playing and betting legally can guarantee that you will safely collect your winnings at the end of the day. It helps to have a working knowledge of some of the laws that specifically attack online gambling and to try and understand exactly what they mean and what they will or will not allow you to do. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) is one such law; any player would be wise to have a working knowledge of this act to continue playing as safely and legally as possible.

Unlawful Internet Gambling Enforcement Act: Background Information & History

It's impossible to get into much detail on the UIGEA without at least a brief recount of the Federal Wire act of 1961, as the UIGEA essentially jumps off of that act to ensure the laws can cover more modern sets of problems. In 1961, the Federal Wire Act was passed in an effort to break up organized crime by attacking large racketeering operations throughout the United States. The act stated that it was unlawful to transfer money won from placing bets or wagers or any information related to placing bets or wagers using any wired system or wiring facility (including, as the courts would later rule, the internet) across state lines or into foreign territories. It held that any persons sending, receiving or facilitating the transfer of money in this fashion could be punished by this law. However, the writing of the law was later interpreted and enforced as being more a countermeasure for booking agents, not players. The act was passed as a means to prosecute key members of racketeering operations. In fact, it was later noted in congress that this act was not meant to go after the “casual bettor,” or even those who bet great sums and “showed some skill.” The target was always the book makers, defined as being “in the business of” wagering and betting.

Jump to November of 2002. The Federal Wire Act is further scrutinized, and it is ruled in courts that the act does not prohibit transfers of money related to winnings in “games of chance,” only sports betting. This meant that, according to the Federal Supreme Court, all online poker games were legal. The UIGEA was passed in 2006 as an add-on to the unrelated Safe Port Act of 2006 specifically to target online poker websites, successfully leading to the indictment of Poker Stars, Full Tilt Poker, and Absolute Poker as websites guilty of using a wire to transfer money won from gambling directly overseas and across state lines.

More: Is Online Sports Betting Legal?

How The UIGEA Affects U.S. Residents

When applying this law to a player in the United States who wishes to participate in any online sports betting or games of chance it is important to remember two things. First and foremost, nothing in the law says that it is illegal to play these games or even collect your winnings. You will not be held accountable to either of these laws as an online player. The second and trickier aspect is finding out how to play on these international sites, receive your payouts and ensure you're playing with a company that is in no legal danger. Pay attention to how your online sportsbook intends to pay you out. To ensure compliance with the UIGEA, there are a couple options. The first is to have a check printed and sent through the mail. This obeys the law because it is not using a wiring service to get you your money. The second method is to set up a bank account with your sportsbook. This gives them a place to deposit your money that does not have to cross any state lines or borders. Once the money is safely in an account with your name on it, it is perfectly legal to make withdrawals from anywhere in the world.

Most Important Thing To Know About The UIGEA

The most important thing to remember about both the Federal Wire Act and the Unlawful Internet Gambling Enforcement Act is that they are not written to go after bettors or players themselves. The only thing that federal law forbids as it pertains to online gambling is the act of directly wiring money over borders or state lines. Rest assured that any sports betting sites operational today have certainly learned to function in the legal climate, and that there are hundreds of players in sports betting states every day who can participate in games of chance and place wagers on sporting events online that can collect their winnings every day.

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