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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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