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Yorkshire Pudding Poker Blog

The Internet Poker Act

07 Dec 10 15:51
Back in 2006 internet gambling, especially online poker, looked as if it had changed forever with the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 in the United States of America.

The UIGEA was passed into American law and it made it illegal for American banks and financial institutions to process payments from American citizens. Whilst a handful of rebellious online poker sites continued to offer their services to American customers, the vast majority did the only thing they could do and that is to act within the law and prevent American players from using their sites.

This obviously had a massive knock-on effect on the entire online poker world, with some of the smaller sites and networks going out of business, some being forced to merge with other companies but ultimately it was the customer who lost out as decreased revenue from the massive base of American players meant less operating funds for sites, which in turn meant less money for promotions and bonuses.

Congressman Barney Frank has been lobbying for internet gambling to be legalised, licensed, regulated and even taxed in the US, and his bill HR-2267: Internet Gambling Regulation, Consumer Protection, and Enforcement Act gave the framework on how to do this. At time of writing, HR 2267 has been passed as a bill and is still waiting to be made into a law, with no definite date on when it will be heard by the house.

However, a law could be passed that will licence, regulate and legalise online poker within the next week! Senate Majority Leader Harry Reid has been working behind the scenes to get the Internet Poker Act signed into law and it could happen as early as next week. Reid's act was meant to be made public by the end of this week but someone leaked the document to the Las Vegas Review Journal and they published it in its entirety.

The bill is a real mixed bag with both some very good points and some horrifically bad ones, especially if you are a professional poker player in the US. The bill, which looks as if it will be attached to the back of another bill that is almost guaranteed to be signed into law (much like the UIGEA was with the SAFE Port Act), shows that online poker sites would have to obtain a licence and that by doing s they would pay 20% tax on all deposits made by players each month. This would mean that even the sites that have gone against the UIGEA would be allowed to offer their services to American clients.

There is a big but though and that is that these sites would have to have a “reboot” period of no less than 15 months where they simply could not offer services to American customers. This would mean that many online poker professionals currently based in the United States of America would have to either be out of a job for 15 months or move to another country entirely! The move is meant to offer sites a level playing field as those who have American facing operation currently have a huge advantage over those who do not.

John Pappas, the executive director of the Poker Players Alliance, had this to say about the 15 month blackout period, “It doesn't make sense for the player or the industry," Pappas said. "I don't know why any new entrants into Internet gaming would want to come into an industry that has been decimated, or the players have all moved to truly unregulated sites, sites with no interest of ever being licensed. They might never win those players back to regulated sites. If someone is interested in operating an Internet gaming site, I'd think they would like to see a much smoother transition.”

Stay tuned for any further developments on what could be the most important couple of weeks in online poker history.
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