Banks Refuse to Process Funds from Nevada Online Poker Rooms
Although three US states have legalized online poker, a few payment processors and banks still refuse to deposit funds in online poker accounts in these states. They continue to comply with the Unlawful Internet Gambling Enforcement Act (UIGEA), which was enforced in 2006, preventing banks and financial institutions from processing gambling related funds.
The UIGEA is a federal law, but years after its enactment, three US states independently legalized online gambling in their jurisdictions after the Department of Justice (DoJ) announced on December 2011 that the federal Wire Act of 1961 applies only to online sports betting and not to online poker and online casino gaming.
Although states have legalized online gambling, banks continue to comply with the old law, which is why several representatives of the online gambling industry clamor for federal-level online gaming legalization. If the US federal government had passed an online poker bill, online poker laws would have been uniform all over the country. But after the death of the Reid-Kyle bill, chances of federal-level online gaming legalization are slim.
Bloomberg says that, among banks that have refused to accept online poker legalization in Nevada, are the country’s second and fourth biggest banks—the Bank of America and Wells Fargo, respectively. Besides, PayPal and American Express are also refusing to deposit funds into Nevada online poker accounts. On the brighter side, a number of US financial institutions have understood the situation and have made quick adjustments in their policies.
On November 26, online gaming sites will go live in New Jersey and major banks and payment processors are expected to continue refusing to deposit online gaming funds. However, the banks may not continue with this policy for a long time. A gambling regulator in Nevada said that the state is currently holding talks with banking representatives to sort out the issue. Since Nevada casinos companies are influential, the banks are expected to shortly make the required adjustments.
Currently, it is difficult to estimate how many players in Delaware and Nevada are affected by these restrictions on the part of banks. Reportedly, the Bank of America has 57 million customers while Wells Fargo has 70 million customers. While Nevada has a population of 2.7 million, Delaware has around one million, and New Jersey has around 8.7 million.
Besides, Nevada gaming regulations prevent players from transferring funds to other players in a bid to prevent what regulators term “shadow banking.”
Poor credit card acceptance rates could be a huge obstacle in the way of the US online poker industry, which is still in its infancy. It could reduce the flow of traffic to Nevada’s online poker rooms, and it is widely known that online poker rooms depend heavily on liquidity to survive. One of the ways to deal with the situation is to increase liquidity by signing interstate online compacts, and this is something New Jersey, Delaware, and Nevada are considering at present.
The issue of banks refusing deposits is irritating to the country’s online gambling industry, which is now controlled by its land-based casinos.