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Table of Contents

Lead Story

Work that net:
The ABCs of online social networking

News

Industry Update

AmEx green with Web access

UIGEA, WTO rules at odds

Alternative currencies - better with plastic?

In the OTA we trust

Slaying the breach elephant

Selling Prepaid

Prepaid in brief

Complexities, solutions for prepaid fraud

Key players in Health Care 2.0

Unity and beyond

Views

Social networking's impact on payments

Patti Murphy
The Takoma Group

A bigger bite for Visa, MasterCard

Ken Musante
Humboldt Merchant Services

Go remote: Boost security and profits

Stuart Taylor
Hypercom Corp.

Education

Street SmartsSM:
Blog on, link in, tweet out

Jon Perry and Vanessa Lang
888QuikRate.com

Marketing with social networks

Vicki M. Daughdrill
Small Business Resources LLC

Much ado about Twitter

Nancy Drexler
SignaPay Ltd.

Summiting the social networks

Dale S. Laszig
DSL Direct LLC

Payments and social networking:
A legal perspective

Adam Atlas
Attorney at Law

Level 4: The small-merchant PCI challenge

Joan Herbig
ControlScan

Company Profile

Global eTelecom Inc.

New Products

A new skimming antidote

Anti-Skim ATM Security Solution
ADT Security Services Inc.

Gift card network at your service

SparkBase 3.0
SparkBase

Inspiration

Lifelong learning: A business strategy

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

April 27, 2009  •  Issue 09:04:02

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UIGEA, WTO rules at odds

A preliminary report issued by the European Commission on March 26, 2009, stated the United States' 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) is discriminatory and violates World Trade Organization rules. A complaint by the London-based Remote Gambling Association triggered the European Union's year-long Trade Barriers Regulation investigation.

In an RGA press release, Clive Hawkswood, RGA's Chief Executive expressed hope for a prompt settlement that "will ensure that EU operators are properly safeguarded, especially in relation to trade that took place prior to the introduction" of the UIGEA.

"We would also hope and expect that the U.S. authorities will act in good faith and immediately suspend any threat of enforcement action pending further discussions with the EU," he added. "There really should be no need for the EU to refer this matter to the WTO if the U.S. responds reasonably."

WTO has muscle

The WTO found against the United States when Antigua filed a similar complaint against the United States for breaking its own trade commitments. Melody Wigdahl, Vice President of Sales and Marketing at UseMyBank Services Inc., has specialized in the gambling industry since 1997.

She said the U.S. "flagrantly ignored" the WTO's ruling in the Antigua case.

However, she indicated it is very different when an entity as strong as the European Union brings a complaint. "I don't see how the U.S. can ignore the situation like they did the first time," Wigdahl said. "This could have very far reaching consequences, other trade agreements across Europe." European companies reportedly lost billions in market value as a result of the UIGEA.

Wigdahl said, given this recent EC statement and the fact that the American Gaming Association (which had funded the opposition to Internet gambling) is now backing the licensing of Internet gambling, everyone in the industry - from analysts to operators - expects a U.S. licensing act soon.

Meantime, Rep. Barney Frank, D-Mass., is re-introducing a bill to repeal the UIGEA. Advocates of Frank's bill estimate repealing the UIGEA would provide the United States $52 billion over the next decade.

New code needed

Wigdahl feels the best approach, and the one most likely to be adopted, is strict licensing of U.S. land-based casinos for Internet gambling, including vigilant oversight and full vetting of people involved in such ventures.

She said casinos could even provide loyalty programs that would apply to their physical and virtual sites. The financial relief to the United States could be significant.

Wigdahl believes the flawed method in use for dispersing gambling gains contributed to the crackdown on Internet gambling domestically and internationally. Winnings are paid out as credit card transaction reversals.

Because no code exists for credits of gambling gains, they appear to be chargebacks, making it impossible for issuing and merchant banks to accurately measure fraud rates for Internet gambling. She suggested creating such a credit code.

She further stated that if the major card brands don't do something to address this issue, the prepaid space could take up the slack, most likely in the form of closed-loop casino cards.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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USAePay | Impact Paysystems | Electronic Merchant Systems | Inovio | Board Studios, Inc.