Poker Strategy | UIGEA: The Act that changed the world of online poker

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UIGEA: The Act that changed the world of online poker

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) is a U.S. law which was approved in late 2006. It was added to the Security and Accountability For Every Port Act of 2006 via conference committee and was signed by President Bush on October 13, 2006. The Act prohibits the transfer of funds from a financial institution to an Internet gambling site, with the notable exceptions of "fantasy" sports, online lotteries, and horse/harness racing.

The UIGEA was aimed at defining and restricting certain aspects of interstate online gambling. Legislatively, it amended the Federal Wire Act. In doing so, it reinforced that financial institutions would be held both criminally and civilly liable for processing related transactions. The Act specifically prohibited people from making a "bet or wager" on events that rely on "outcome of a contest of others" including:

Dog racing
Lottery participation
Gambling on athletic events

The bill exempted:

Horse racing
Securities transactions
Commodities transactions
Over-the-counter derivative instruments
Indemnity or guarantee contracts
Insurance contracts
Bank transactions (transactions with insured depository institutions)
Games or contests in which the participants to do not risk anything but their efforts
Certain fantasy sports contests.

All online gambling sites listed on the London Stock Exchange or similar markets had to stop taking United States players due to the passage of the Act. Companies such as Party Gaming Plc lost a huge chunk of their player base as well as their market cap due to this act. In April 2007, U.S. Congressman Barney Frank introduced a bill to overturn the gambling aspects of the Act, saying "The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone." In a way the UIGEA act changed the way online poker and gaming companies function .