Banks Clamp Down on Internet GamblingRegulations under America’s Unlawful Internet Gambling Enforcement Act (UIGEA) are nearly two weeks overdue, but their effects are already being felt on Antigua and Barbuda’s online gambling industry.
The UIEGA, which was passed last year, made it illegal for banks and other financial institutions, like credit card companies, to process and transmit payments for transactions with online gaming companies.
The US legislation seeks to effectively prohibit gamblers from using credit cards, cheques and electronic transfers to settle online wagers.
With the majority of online gamblers at the time based in America, the fallout from the passage of the Act has dramatically reduced the value of what was, at its peak, estimated to be a US$12 billion industry.
In Antigua and Barbuda, it led to the widespread withdrawal of public gaming operators from the market.
The legislation stipulated that regulations would be put in place to guide financial institutions on their obligations under the UIGEA.
The US government has said that the regulations will be released shortly, but Antigua and Barbuda’s former gaming director Ron Maginley has said that their effect is already being felt by companies.
“I was informed by a couple of gaming companies that some jurisdictions have already started to close gaming accounts,” he said.
Maginley noted that the Isle of Man recently gave notice to gaming companies that it intends to close all gaming-related accounts.
“Already, some companies here have been given notice. Under the law here, gaming companies are required to put ‘gaming’ in their names and in relation to getting accounts, certainly the local banks here are showing reluctance to offer new accounts, even to companies registered here.
"That is made even worse internationally where a number of banks are simply refusing to either continue providing or to provide new accounts to gaming companies.”
He said several months ago local banks were given notice by corresponding banks overseas that there were concerns about domestic gaming accounts.
“Because the US legislation makes US banks criminally liable for facilitating gaming companies, you can have a situation where even domestic banks, because thy are concerned about the loss of corresponding accounts, are forced to close local gaming accounts,” Maginley told the SUN.
Maginley added that the magnitude of the current challenge becomes clear when one considers that a gaming company cannot function or continue to exist if it cannot maintain a bank account for the purpose of remitting cash.
He said under a worst case scenario, gaming companies might find themselves licensed in Antigua and Barbuda, but unable to get an account to meet payroll or local operational expenses.
When contacted yesterday, Director of Gaming Kay McDonald said that she was unaware that local banks are displaying reluctance to open or maintain accounts for Internet gaming companies.
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Patricia Campbell, Antigua Sun
Originally published to Gambling911.com July 23, 2007 9:00 pm ET
