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June 29, 2009updated 04 Apr 2017 4:17pm

Online gambling war rages on

Enforcing the controversial US Unlawful Internet Gambling Enforcement Act (UIGEA), a Southern District of New York federal prosecutor has frozen bank accounts of payment processor Allied Systems containing some $34 million in poker players deposits and payouts, reports advocacy group The Poker Players Alliance The move against Allied Systems comes at a time of growing opposition to the UIGEA which, with the exception of horse racing and lotteries, outlaws online gambling by US residents and effectively criminalises online gambling provided by foreign operators

By Stafford Thomas

Enforcing the controversial US Unlawful Internet Gambling
Enforcement Act (UIGEA), a Southern District of New York federal
prosecutor has frozen bank accounts of payment processor Allied
Systems containing some $34 million in poker players’ deposits and
payouts, reports advocacy group The Poker Players Alliance.

The Allied Systems accounts, according to national media coverage,
are held with Alliance Bank of Arizona, Wells Fargo, Citibank and
Goldwater Bank.

The move against Allied Systems comes at a time of growing
opposition to the UIGEA which, with the exception of horse racing
and lotteries, outlaws online gambling by US residents and
effectively criminalises online gambling provided by foreign
operators.

Leading opposition in the US is Congressman Barney Frank, who in
May introduced a bill that would effectively set aside the UIGEA by
legalising and regulating online gambling operators.

Frank is receiving strong support outside the US, with the most
significant coming in June in a report published by the European
Commission (EU).

In its damming report, the EU concludes that the UIGEA constitutes
an obstacle to trade that is inconsistent with World Trade
Organisation (WTO) rules. As a result WTO proceedings against the
US would be justified.

In its report, the EU stressed that, although European online
gambling and betting companies left the US market in 2006, they
still suffer legal proceedings by US authorities based on their
past activities in the US.

The report highlights that these proceedings are legally
unjustified as well as discriminatory, because the activities of EU
companies took place under the cover of US WTO commitments.

EU Trade Commissioner Catherine Ashton said: “Internet gambling is
a complex and delicate area, and we do not want to dictate how the
US should regulate its market. However, the US must respect its WTO
obligations. I hope we will be able to reach an amicable solution
to this issue.”

According to an estimate by gambling industry research firm
Christiansen Capital Advisors, annual spending by US consumer on
online gambling could be reduced by up to $10 billion if
enforcement of the UIGEA was totally effective.

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