Sunday, August 05, 2007

UIGEA Regulations Due --- Online Poker World Holds Collective Breath

In the near future, U.S. poker players will find out what's in store for them when the regulations specifying the administration of the Unlawful Internet Gambling Enforcement Act [UIGEA] are released. And pardon the conjunction of "unlawful" and "online poker" in the previous sentence, because poker isn't unlawful (except in a few backwater states at the moment) in its online version.

While the specifics aren't yet known, in general terms, it's not likely to be pretty. Banks cannot be held liable under the new regulations as they're going to be issued, but that doesn't mean that banks aren't going to be pressured to turn off some of the transaction channels anyway. Nor will the guidelines, once released, go into immediate effect: there will be a period for public comment and fine-tuning before the regulations become 'live.'

Major speculation centers around ePassporte, the online-payment processor that services only poker transactions among all forms of gambling. ePassporte --- who no one had even heard of two years ago --- may play a crucial role in the short-term future of online poker for the U.S. If ePassporte, a U.S.-based business itself, finds its transactions blocked, it will either have to close up shop in servicing poker accounts or file for an immediate injunction against enforcement of the law; no one knows for sure what the company will do. In a similar manner, the remaining poker sites servicing the U.S. will once again face the choice of whether they really, really want to stay. While they're committed in principle to servicing the U.S., in reality it may get more and more expensive for these sites on a per-account basis. But as with ePassporte, only time will tell.

Alternate payment channels continue to evolve, but none of them have the speed of the old payment processors. ePassporte transactions can take anywhere from hours to days, and that's on top of the site's own processing time. Some of the alternate/evolving payment services center around virtual phone cards, giving the funds so entrusted a dual-purpose use, but funding those services will also likely be an evolving scenario; in one example, Nucharge, the virtual phone-card add-on servicing Bodog, no longer accepts MasterCard deposits. Nonetheless, most of the alternate channels set up do work as promised.

It's a time of flux in the online-poker world. In a few weeks we'll all know more, as the iMEGA case against the U.S. receives its hearing. The WTO matter, still slated for arbitration, won't change anything on its own, but it continues to add ever-increasing pressure on the U.S. to honor its own commitments. The U.S. camel's back is gathering lots of extra straw, but it hasn't broken yet.

Stay tuned....

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