On October 13 President Bush signed into law the Internet Gambling Enforcement Act (“IGEA”), which prohibits the use of checks, credit cards, and electronic fund transfers for online gambling transactions. The IGEA’s sponsor was Virginia Republican Congressman Robert W. Goodlatte. The law puts the onus for enforcing its restrictions on banks and credit card companies. Congress attached the IGEA to port-security bill legislation to ensure its passage. SiliconValley.com reported on October 13 that immediately in the wake of the IGEA’s signing, British-based gaming companies Sportingbet PLC and Leisure & Gaming PLC sold their U.S. operations–for $1.00.
Will the IGEA be effective? A Washington Post article on the bill’s signing reported that 23 million Americans wagered approximately $6 billion online last year. The IGEA won’t make those gambling urges and that river of cash go away. If history is any guide they will go underground. Can we expect new back-channel methods to arise to process online wagering transactions, ones that hide the identities of the parties and shield the nature of their payments? Yes, we can, if history is any guide. But why should our elected representatives study history?