Report of the Law Reform Committee on Online Gaming and Singapore
amended in 2000 to reflect the changes brought on by the onset of Internet gambling to explicitly expand interstate off-track wagers to include wagers through the telephone or other electronic media.
The Unlawful Internet Gambling Enforcement Act of 2006 and beyond
The first US statute to deal directly with the issue of online gambling was the
Unlawful Internet Gambling Enforcement Act of 2006.95 The UIGEA was incorporated into the SAFE Port Act,96 which prohibits financial institutions from processing payments from sites that are deemed illegal. The UIGEA basically makes it illegal for financial institutions to collect on debts incurred on an online gambling site. The UIGEA’s stated purpose is “to prevent the use of certain payment instruments, credit cards, and fund transfers for unlawful Internet gambling, and for other purposes.” It serves basically to disable the financial services sector from facilitating the transmission of funds in making bets and wagers, thereby prohibiting online gambling within the US jurisdiction by anybody through any company. 97
The UIGEA (§ 5363 and § 5366) bans and criminalises the acceptance of funds
from bettors by operators of most online gambling websites, hence it applies to those involved in the business or operation of betting or wagering. It does not make it illegal for players to make online bets or wagers. § 5262 of the UIGEA defines a bet as the staking or risking of property in order to win something of value based on the outcome of a contest of others, a sporting event, or a game subject to chance; the purchase of a chance to win a lottery or other prize the award of which is predominantly subject to chance and the making of a wager prohibited under the Professional and Amateur Sports Protection Act.98 Notably excluded from the definition are, for example, pay-for- play games such as god games or fantasy games as well as social and networking
See also the American Gaming Association, “Federal Issues: Status Reports” available at http://www. americangaming.org/hillupdate/reports detail.cfv?id= 9 and Gerd Alexander, “The US on Tilt, Why the Unlawful Internet Gambling Enforcement Act is a Bad Bet” (2008) Duke L & Tech Rev 6, available at http://www.law.duke.edu/journals/dltr/articles/2008DLTR0006.html (calling for licensing and regulation instead).
SAFE Port Act of 2006, Pub L No 109-347, HR 4954, 109th Cong (passed by Congress on 13 October, 2006), available at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.04411:.
It defers to state-authorised and licensed in-state gambling activities but does not do so for other countries. The Act appears to have extra-territorial reach over foreign-owned and registered financial institutions that operate online and that may transact in a manner that falls under the provisions of the UIGEA.
Including “any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering”.
The UIGEA includes exemption for intrastate online gambling that is “expressly authorised” by state law such as lotteries. It also includes an exemption for “any activity that is allowed under the ‘Interstate Horseracing act of 1978’”. This law makes no changes to the two favoured forms of gambling that generates revenue and campaign contributions. It also lets the established physical casinos to offer remote gambling as long as it does not cross state borders. UIGEA has effectively failed at banning Internet gambling but its success and its impact can only be measured in future considerations. It depends on the way banks and financial institutions are able to easily identify and block financial transactions and also in
(cont’d on the next page)