After all the noise, it happened swiftly, quietly and painfully. The US finally got its online gambling bill through the senate after tagging it on to the 'safe port act'
bill over the weekend. This security bill has absolutely nothing to do with gambling – online or otherwise – but such is the ridiculous nature of US politics.
The so-called "Unlawful Internet Gambling Enforcement Act" effectively makes it illegal for finance companies to process online gambling payments. It still leaves a grey, unknown mess by not really outlining or modernising the wire act – or even establish a real online gambling definition – but essentially thats it for US players. The President has to sign the bill shortly – but thats almost a guarantee since the 'Safe Port Act' bill was a fairly unanimous decision for politicians on both sides.
And so prohibition has returned to the US – as online poker players will either have to find ways of getting sites to break the law – or just give up their hobby. Most online gambling site – legitimate multi-million dollar companies that are listed on the UK's stock exchanges are already going through the drawn out process of regulation – will no doubt ban American players despite the UK and other established jurisdictions such as Gibraltar not having any restriction for US players.
The result of the bill was expected. Shares tumbled drastically on monday for all the major players – leaving many companies primed for takeover. A massive $8 billion market value was wiped out, as companies like Partygaming, who have a 78% US player base, said they'll ban US players as soon as Bush signs off the new law. Party dropped 60%, whilst 888.com saw almost half its value disappear. Sportingbet nosedived 67%.
Its likely many online gambling companies won't survive this latest blow.
Unfortunately for players, the companies eliminated in the shakeout are more likely to be publicly traded operators that answer to regulators in Britain than privately held firms more likely disappear into the ether of the Web, warns Linda Goldstein, a partner with Manatt, Phelps & Phillips.
"The upshot is the legislation will drive away larger, more reputable gaming operators, leaving consumers with less reliable options," says Ken Dreifach, an Internet lawyer who once worked for Spitzer. That could expose consumers to more fraudulent operators, he says.
Article: New legislation may pull the plug on online gambling