February 18, 2010

MasterCard turns back on US online gambling

Internet gambling in the United States is not, technically speaking, illegal, and players don’t face penalties for gambling online. Instead, current gambling law in the US targets banks and other financial providers that help US players to fund their online accounts. Under the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, banks can face penalties for helping players to make deposits and withdrawals to online accounts associated with internet gambling.

The UIGEA, however, is not actually in force. It was meant to come into action months ago, but its implementation was delayed. Despite this fact, banks are already taking action to prevent future legal trouble. MasterCard, and to a lesser extent Visa, have in recent weeks began to pull away from the online gambling world in what appears to be a precautionary move.

One problem MasterCard and its rivals are facing is that online gambling firms have a habit of re-coding financial information so it looks as if the transactions that are being processed have nothing to do with internet gambling. MasterCard has been hard at work investigating these situations, and are cracking down on such activities.

While there is a good chance that American gambling laws will soon change and that online gambling in the US will become fully legal, it seems that major banks don’t want to take any chances. As a result of MasterCard’s apprehension, many online gambling sites that accept US players, including Doyles Room, Absolute Poker, and Bodog, have been forced to stop accepting MasterCard as a viable payment method for US players.

In the meantime, a British company called UC Group Ltd. has announced the launch of SecureTrading Inc., a new electronic payment processing system that will be based in the New York area. It is being set up to service internet casinos and online poker sites in the United States.

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