Banks preparing to block online gambling transactions (UIGEA)
Letters have been sent out by the banks will serve as a warning to the penalties that will come in to effect in December due to the UIGEA(Unlawful Internet Gambling Enforcement Act) in the United States. The letters sent out by the Nevada State Bank stated: "In compliance with the U.S. Unlawful Internet Gambling Enforcement Act, we are required to notify you that you are prohibited from processing transactions derived from Internet bets or wagers where such bet or wager is unlawful under any applicable Federal or State law."
The law is still highly debatable to whether the playing of Internet poker is illegal, but to the banks this will be a different story, but the act only states that it is illegal to send deposits from banks to internet gambling sites and does not include the withdrawals made from the sites to the banks.
Most banks will not process transactions derived from internet bets or wagers. Whether the letters sent out by the banks are just threats or not, as UIGEA has hurt the industry so much already, blocking people of making withdrawals would be worse as there will not be an incentive for people to gamble online in the United States. The biggest problem would be that the banks will be able to overblock any transactions to make sure they comply with the UIGEA.
There are still people that are fighting to overturn the act and fighting against full implementation of the UIGEA. The act introduced by Barney Frank, the Reasonable Prudence in Regulation Act, which would delay the date of the compliance a whole year. Even with 34 co sponsors the act is still in the first stage of the legislative process and it will need to pass through the House Committee of Financial Services before it will even be discussed in the Full House.