Affect on consumers

This is a story I posted on our Web site a few days ago. The most interesting part for me was I. Nelson Rose's belief that the companys shutting out U.S. customers hadn't read the bill!

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The Unlawful Internet Gambling Enforcement Act passed by Congress, coupled with the flurried response of Internet gambling companies around the globe, has left many wondering what the impact of the bill will have on the Internet gambling habits of Americans.

Most of the answers remain to be seen.

Industry giants PartyGaming – parent company of Party Poker – 888, and Cryptologic, have already announced that they will stop taking bets from U.S. customers when President Bush signs the act into law. Until the law is signed, customers can wager real money at these sites, and PartyGaming will allow Americans to play free money games even after the law goes into effect.

"Customers will continue to have access to their account at any time," said John Shepherd, Director of Corporate Communications for PartyGaming. "Withdrawals from PartyAccounts are not prohibited by the Act."

BetFred.com, which hosts an Internet poker room, sportsbook and casino, is taking a different approach, closing all accounts the company believes "originate in the USA." Account holders were sent an e-mail with a phone number to call to claim their remaining balance from their accounts on Tuesday morning.

Legal expert I. Nelson Rose says online casinos who have pulled out of the U.S. may change their minds.

"I think they didn't read the bill," Rose said. "I know the boards of directors were meeting over the weekend, but it took me a full day to figure out (what the bill means)."

While the bill outlaws U.S. financial institutions from allowing transactions to Internet gambling accounts, Rose points out that most banks and credit cards already block them.

Federal regulators will have 270 days from the time Bush signs the bill to create rules that financial institutions will have to follow to be in compliance with the law. What regulators do with offshore third-party payment processors such as Neteller and FirePay, which do allow transfers to Internet gambling accounts, may determine the fate of American online gamblers.

"There's a danger there," Rose says. "I don't think 100 percent of Neteller's business is with gambling sites. Unless they take a zero tolerance policy and say as long as Neteller allows money to be transferred to a gambling site, you can't transfer money to Neteller, then Neteller would not get on the list."

Rose also points out that the bill does not make it illegal to for a user to gamble online, but considering the industry response, it may be much more difficult for a consumer to find a site that will accept a bet.

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Aaron Todd
Gaming Industry Reporter
Casino City