The UIGEA was supposed to crush online gambling. By choking off the methods using to fund online casino and online poker accounts, it was presumed that American players would be unable to fund accounts, and therefore be unable to gamble online. There was much back-slapping done by the proponents of this bill, and Senator Kyl famously said that the bill had wiped off tens of billions of dollars from the market cap of online gaming companies.
The problem is that the people who run online gaming companies, in my opinion, are much brighter than the people who passed this bill. These are multi-billion companies; they aren't just going to pack up and go home because a gambling bill was shadily attached at the last second to the Port Security Bill. They are going to find alternative methods of getting people to fund accounts.
Way back when, Paypal stopped processing gambling transactions, and most credit card companies refused to process payments to online gaming sites. At the time, this was catastrophic news, and there were worries that the industry might not survive (I believe this was just after 9/11.) Well guess what, the industry found a way around that, and prospered. Just like they will do again this time.
After the UIGEA passed, numbers dropped quickly at poker rooms such as Pokerstars, Full Tilt Poker. You could see it in the big Sunday tournaments. Since then? These rooms have found alternative methods of funding, and their numbers have risen back up to where they were before the gambling bill was passed. It's a little inconvenient getting money on and offline now, but it can still easily be done.
What was the goal of the people who passed the gambling bill? They wanted to crush online gambling, and make it impossible to fund an account. You have to ask yourself.. did it work?
In my opinion, the answer is a resounding no.
Filed Under: UIGEA