You sit down at your computer and click over to your favorite online casino, planning to spend the next hour or two relaxing and playing poker. It used to be much easier when you could use your credit card, but Visa and MasterCard stopped accepting e-gambling transactions in 2001. You, like others, had to find other ways to cover your online casino transactions. Now the government is talking about stopping the gambling and credit establishments from taking money from people in the United States to use for gambling activities. They are trying to cut off the electronic funds transfers that you use to pay for your online gambling. Will they be able to do it?
Are online free casino with customers in the United States heading for trouble? They are if U.S. lawmakers have their way. Last month, on July 11, 2006 the United States House of Representatives passed HR 4411, the Internet Gambling Prohibition and Enforcement Act. The purpose of this Act is to try to plug a hole in the U.S. Wire Act (1961). This is the law that makes gambling transactions over phone lines illegal. If the provisions of the Internet Gambling Prohibition and Enforcement Act is enacted this law would prohibit the use of credit cards to pay for gambling online. It would also make it illegal for online gambling sites, poker sites and betting companies to knowingly take money from customers in the United States. In other words, the bill is trying to choke off the electronic transfer of funds that finances the online gambling activities. The bill would also earmark $10 million a year for enforcement for three years. The sponsors of the bill feel that the existence of online gambling leads to addiction and that they are trying to head off a serious problem before it spreads. Interestingly enough the bill doesn’t apply to horse racing and state lotteries.
Online gambling is a $12 billion per year business with almost half of it coming from customers within the United States. As most customers already know, they can’t use their Visa, MasterCard or merchant bank to finance their online gambling activities since these establishment have been refusing e-gambling transactions since November, 2001. In order to pay to play online they have to use an e-wallet like Neteller, FirePay and CentralCoin. What effect will this legislation have on online gambling? Probably very little! In 2001 after Visa and MasterCard began refusing e-gambling transactions, there was a decrease in activity in the industry. Revenues were down by twenty percent. They made it up by the next year and went on to grow as other methods of financing gambling activity came into being. This legislation makes illegal a practice that two of the major credit card companies stopped using almost five years ago. How much of an effect can it have since it doesn’t cover the e-wallets? The online casinos are out of the country so they can’t close them down. They may plug the hole in the Wire Act but since the practice was stopped voluntarily by the Visa, MasterCard and the merchant banks, there won’t be much that will be stopped. The financial purse strings that they are cutting aren’t the ones that lead to the online gambling parlors.