Newly proposed laws aimed at cutting off the money supply to online casinos have targeted credit cards. MasterCard on-line gambling restrictions have been increased on US citizens attempting to make deposits at on the web casinos.
The legality of online gambling has been long debated. The act of making a deposit in a online casino may fall under the Government Wire Act of 1961. The particular Federal Wire Act was created in order to illegalize using telephones for the purpose of placing bets. The telephone had allowed people who lived in areas where gambling had been illegal to begin gambling in areas where gambling was legal.
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Online gambling deposits are required to be coded with a sic code of 7995 so that they can be identified. Many online casino operators use sic codes that are specified for other online purchases to prevent having deposits declined. MasterCard dealings using both the correct and wrong sic codes have begun becoming declined at an unprecedented rate. The action sends a signal that Master card is preparing for the enforcement associated with America’s Unlawful Internet Gambling Enforcement Act (UIGEA). This act is designed to ban the facilitation of on the internet gambling by the banking industry.
Our elected representatives has unsuccessfully attempted to stop internet gambling in the past. The taxation associated with online gambling is extremely difficult. Our elected representatives views online gambling as a lack of income. while voters see it being a personal choice. This has made it very hard to get legislation passed. In 06\ the UIGEA was put through being an attachment to a Homeland Security bill.
Online casinos operate outside of the legislation of the US government and therefore it will probably be difficult to enforce the UIGEA. In fact the UIGEA could only end up being enforced in the most serious cases. It would be impossible to investigate all suspicious transactions. The real success of the UIGEA will be in creating financial obstacles for new online casinos and which makes it more difficult for online casinos to accept deposits. Ultimately new businesses which will “launder” deposits by acting since middlemen will arise.
The long term prospects for the online casino industry probably lies in debit cards. Currently you will have a better chance of completing an online gambling transaction using a debit card than a credit card. The reason being using credit is essentially borrowing the cash to gamble from a bank. Having a debit card you are removing your own cash from your bank account. This decreases the banks exposure. Prepaid free e cards are funded ahead of time and can just be used for the amount that was funded.
Many experts then started believing that credit cards would disappear as a way of funding online gambling transactions, as they believe that the solution lies in some form of debit card. Currently, the odds associated with completing a gambling transaction with a debit card are better than using a credit card. This is because using a credit card is the same as borrowing money from the issuing financial institution. With a debit card, money will be instantly taken from your account. This in turn reduces the risk to the website and financial institution. Still at this point the only legislation passed against online casinos acting outside the US is in the banking. Online gambling has not been outlawed.