When the Unlawful Internet Gambling Enforcement Act (“UIGEA”) was signed into law in October 2006, legal experts predicted the act would scare away credit card companies from funding businesses that could arguably be construed as illegal sports gambling.
The prevailing theory, at the time, was that even if U.S. laws could not deter entrepreneurs from entering into risky online gaming markets, U.S. laws could certainly deter prudent and stodgy credit card companies such as Visa and MasterCard from funding these gaming ventures.
At first, the UIGEA seemed to work. But over time, the UIGEA’s impact has been far more limited than what Congress may have expected.
Today, few, if any, payment processing companies seem to be truly afraid of the UIGEA. Only eBay , which operates the payment processing company PayPal, takes the threat of government action at all seriously.