Understanding The Unlawful Internet Gambling Enforcement Act (UIGEA)

Law ScaleThe Unlawful Internet Gambling Enforcement Act (UIGEA, 2006) is perhaps the most misunderstood USA gambling law that exists. The biggest misconception about this law is that it targets individual bettors, preventing them from engaging in any form of online gambling.

In actuality, the UIGEA is targeted at domestic banks and other US-based financial institutions and aims to regulate how they process transactions to and from unauthorized gambling operations. The nominal purpose of the law is to stop illegal financial practices like money laundering from occurring within the industry.

Today, the UIGEA is merely an inconvenience that might affect credit card deposits on occasion, but that’s literally the extent of its impact on the offshore gambling industry, and cryptocurrencies like Bitcoin have rendered even that aspect almost totally moot.

What Did the UIGEA Do For The Online Gambling Industry?

Essentially, all the UIGEA did was clean up the financial channels of the online gambling industry. At the time of its passing, many online gambling businesses stopped doing business with American bettors. Some sites, like Absolute Poker and Poker Stars, still continued accepting US customers, but they were eventually shut down on the infamous Black Friday (April 15, 2011) when federal indictments against them were unsealed.

Ultimately, the UIGEA did the industry a favor by prompting most online gambling operations to relocate offshore, which is why the offshore betting industry is now the juggernaut it is. Because of this, legal offshore casinos, poker sites, and sportsbooks are more legitimate and feature stronger financial structures than even their domestic counterparts. You can’t gamble with Bitcoin at a US-based casino, after all!

How Does The UIGEA Affect US Based Gambling Sites?

The UIGEA determines how domestic banks are allowed to handle gambling-related financial transactions to and from online casinos and sportsbooks. Essentially, the law required US financial institutions to put in automated measures to prevent money transfers to and from unregulated gambling sites.

Of course, given the volume of gamblers participating online, this automated system rarely flags these transactions, and the law is mostly toothless. Still, domestic operators and their banking partners are bound by it, and legal offshore gambling sites will occasionally be unable to process credit or debit deposits as a result.

Does The UIGEA Affect Offshore Gambling Sites?

Yes, but mostly no. Offshore sites operating legally in their home countries can accept real money wagers from US players, but the UIGEA has made it occasionally inconvenient to deposit with credit and debit cards.

While these sites still accept Visa, Mastercard, and American Express, gamblers may see their transfers blocked roughly one to two percent of the time. Bitcoin and other decentralized cryptocurrencies bypass the UIGEA entirely, and all reputable offshore sites now prefer to accept crypto deposits for this reason.

Remember, the UIGEA doesn’t make it illegal for you to place bets online. Our recommended offshore gambling sites fall outside the jurisdiction of US federal laws. The same holds true when applying the Federal Wire Act and PASPA (before it was overturned).

Does The UIGEA Target Individual Bettors?

No. The UIGEA deals with banks and other financial institutions and how they process financial transactions related to unauthorized or unregulated online gambling. In no way does the UIGEA prevent people from placing bets online or criminalize them for doing so.

Is It Legal For Me To Gamble With An Offshore Gambling Site?

It depends on the offshore gambling site that you use. If the destination at which you are gambling is legally sanctioned and has regulatory oversight from a respected government able to trade with the United States, then it is perfectly legal for you to bet with them.

The UIGEA only affects offshore gambling sites when it blocks a credit/debit deposit, and gamblers can simply use a different deposit method like Bitcoin or even try to run their cards again a few minutes after rejection.

Will The UIGEA Affect How I Get My Money?

Yes. For example, you may be able to use your debit or credit card to make a deposit, but you can no longer reliably receive card chargebacks as payouts. No reputable gambling site offers these kinds of payouts anymore, as the UIGEA was interfering with customers getting their winnings in a timely fashion. Our Banking section has more information regarding deposit and payout methods used by legal offshore gambling sites.