Whether you’re playing poker online, wagering on sports, or betting in a casino, online gambling has become an increasingly popular way to gamble. With the proliferation of high-tech computer software, the process is now more fun and interactive than ever.
In the early 1990s, the Internet became an increasingly popular platform for gambling. The growth of online gambling was so fast that the National Gambling Impact Study Commission estimated that revenues from online gambling had reached $2 billion by 2000. By 2005, the online poker industry had grown to 18 percent of total online gambling revenues. In 2006, the UIGEA (Unlawful Internet Gambling Enforcement Act) was signed into law.
In 2004, the United States disputed a ruling by the World Trade Organization (WTO) that its laws pertaining to online gambling were in violation of international trade agreements. The United States was accused of imposing illegal restrictions on foreign businesses that offered online gambling services. It was also claimed that the United States harmed Antigua and Barbuda’s economy by prohibiting its citizens from gambling.
In September 2004, the WTO convened a panel to review U.S. laws and regulations governing the Internet. Ultimately, the panel ruled that the United States was in violation of its international trade agreements. In addition, the panel found that the U.S. was not the only country violating its own laws. In the end, the United States refused to change its stance.
While the UIGEA did not change the United States’ position on online gambling, it did set the stage for a major legal case. In October 2006, the Department of Justice seized $3.3 million from an online poker company, Paradise Poker. The owner, manager, and 12 customers were charged with violating state gambling laws.
The UIGEA was not the first law enacted to address the online gambling market. In 1998, Senator JonL. Kyl introduced a bill to amend the Wire Act. His bill would have prohibited credit card companies from processing transactions with online gambling establishments. However, it failed to pass. The most common misunderstanding about the bill is that it would have prohibited sports betting.
The WTO was not convinced. They argued that the United States treats foreign businesses like criminals. In fact, they were considering filing a complaint with the WTO. In fact, the most interesting part of the WTO ruling was that the United States would have been in violation of its own laws.
In the midst of all this, the Department of Justice intervened when Discovery Communications agreed to air ads for the Internet gambling site, Paradise Poker. The company aired $600,000 worth of ads. Eventually, the ads were pulled, and the remainder of the ads were deemed unworthy of being aired.
The Revision Petition had the same effect, but it was the other way around. In the Revision Petition, two parties gave their customers a password and a login ID. The parties in the Revision Petition then created a website that had a similar function, but was actually a lot smaller.