It’s one thing to enforce the UIGEA law based on the abstract concept that money is wrongly leaving the United States economy, but it’s another now that online gambling is legal in 3 states. Now, the money isn’t just leaving the “economy”, but also strong casino business interests, too.

The 2006 UIGEA (Unlawful Internet Gambling Enforcement Act) was meant to put offshore gambling out of business. It enacted specific laws against processing financial transactions to known offshore gambling sportsbooks and casinos. Although it initially slowed the industry down, savvy payment processing companies setup shops that operated a financial shell game, processing funds under the name of one business and then shuttling the money to a gambling website afterwards. It worked, and law enforcement has been trying to keep pace ever since.

Additionally, the Department of Justice has been proactive in bringing civil suits and criminal charges against many big name operators, including PokerStars, AbsolutePoker, Full Tilt Poker, and Bodog’s Calvin Ayre. The former companies either settled or ceased taking bets from the USA. Meanwhile, Calvin Ayre has hired a high-end lawyer to litigate his case as he remains outside the jurisdiction of USA law enforcement. Ayre continues to make money with USA facing,, and – a website targeting the burgeoning Asian market.

Many industry veterans viewed these prosecutions as nothing more than bluster: none of these gambling companies have any known ties to terrorist groups, so the only crime they were perpetrating was one of making money in the USA tax free. As with any economic activity, the government wants its fair share. Staunch opponents to the USA’s anti-offshore gambling policy – including Antigua and Barbuda – filed suit with the WTO 2003, alleging unfair trade practices and discrimination against legal businesses operating in their sovereign countries. The result has been a muddled mix of vindication for the offshore gambling haven, with some portions of the WTO’s decision siding with the USA.

With Big USA Casino Brands Pressure the DOJ to shutdown offshore operations?

There’s no easy answer to that question. The DOJ could let the market of legalized online gambling in the USA crowd out the offshore competition, saving tax dollars on investigations, litigation, and court hearings. Alternatively, the DOJ might be emboldened to get rid of the offshore operations once and for all, since they will have the political backing of lucrative, well established casino brands.

Given the cash-strapped disposition of the government, a market solution might make sense. Natural economic forces will get rid of those who can’t compete with the big boys. Offshore gambling operators will sell and consolidate until their businesses are no longer profitable. Gambling affiliates will slowly switch to legal USA brands, with the very real possibility that their income stream could slow down or dry up completely.

A more proactive DOJ might explicitly outlaw any sort of promotion of offshore gambling brands in the USA by ANYONE, including gambling affiliates, bloggers, and sports picks services. They might also confiscate domain names and launch far reaching investigations. Policymakers could also cut deals with countries in the Caribbean and Latin America that welcome online gambling. For example, if Costa Rica outlaws USA facing online gambling, the United States will ratchet up Coast Guard anti-narcotics patrols, or send more investment money to traditional industries. Costa Rica might bite if the online gambling companies can’t compete with a juicy financial offer from the USA.

It will be very interesting to see how all this plays out in the coming months. For now, the skirmishes are establishing legal jurisdictions, future brand names, and eliminating competition from “bad actors”. The first bad actor with potential red carpet removal :) would be Poker Stars, who is trying to get their foot in the door by purchasing a dying Atlantic City casino brand. If successful, they can then file for an online gambling license. The AGA (American Gambling Association), the nation’s leading casino and sportsbook organization, has already filed briefs with New Jersey regulators attempting to block Poker Stars’ acquisition attempt. This is merely a business move, to get rid of ANY competition, regardless of whether or not the company in question acted illegally previously.

Keep your ear to the rail and Good Luck from!