The UIGEA prohibits gambling businesses from "knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.

The United States Court of Appeals for the Fifth Circuit ruled in November 2002[2] that the Federal Wire Act prohibits electronic transmission of information for sports betting across telecommunications lines but affirmed a lower court ruling that the Wire Act "in plain language does not prohibit Internet gambling on a game of chance".

[6] Although a bill with the gambling wording was previously debated and passed by the House of Representatives,[7][8][9] the SAFE Port Act (H.R.

Among the Congressional supporters of the Act were Rep. Jim Leach [R-IA], a former chairman of the House Banking Committee and Rep. Robert Goodlatte [R-VA], who co-authored H.R.

In October 2007, these agencies issued a "Notice of Proposed Rulemaking",[14] which effectively tabled draft UIGEA regulations for public comment.

[citation needed] This last-minute rulemaking that binds the hands of an incoming administration is commonly termed the midnight drop.

Restricted transactions involve gambling businesses when they knowingly accept payments from another person in a bet or wager over the Internet.

It also requires that the Treasury and Federal Reserve Board with consultation from the Attorney General to promulgate regulations requiring certain participants in payment systems that could be used for unlawful Internet gambling to have policies and procedures reasonably designed to identify and block or otherwise prevent or prohibit the processing of restricted transactions.

[4] The opening section of the act also states that "new mechanisms for enforcing gambling laws on the Internet are necessary," especially for cross-border betting.

The Act defines a bet or wager to include risking something of value on the outcome of a contest, sports event, "or a game subject to chance".

"Financial transaction provider" is a very broad definition covering everyone who participates in transferring money for illegal Internet gambling.

The courts have the power to issue temporary restraining orders and preliminary and permanent injunctions to prevent restricted transactions.

Under section 5367, the Act makes ISPs and financial institutions liable if they actually operate illegal gambling sites themselves.

Lastly, the Act requests, but does not require, the executive branch to try to get other countries to help enforce this new law and "encourage cooperation by foreign governments" in identifying whether Internet gambling is being used for crime.

[18] Gaming consultant Michael Shackleford has also been critical of the UIGEA stating that the act has "undoubtedly depressed play" but has failed in its primary objective as "there are ways of funding accounts without using US banks, and millions of players know that".

[23] Antigua and the United States have been involved in a long-running World Trade Organization dispute over U.S. restrictions on online gambling.

The WTO ruled on January 25, 2007, that the U.S. is in violation of its treaty obligations by not granting full market access to online gambling companies based in the island nation.

[25] On June 19, Antigua filed a claim for US$3.4 billion in trade sanctions against the United States, along with a request for authorization to ignore U.S. patent and copyright laws.

"[27] When the administration continued to keep the information secret, Public Citizen brought suit on behalf of Ed Brayton, a journalist whose FOIA request had been denied.

[28] In May 2009, Congressman Barney Frank introduced a bill to overturn the gambling aspects of the Act, "The Internet Gambling Regulation, Consumer Protection, and Enforcement Act", which seeks to repeal the major online gaming obstacles of the UIGEA and go further in protecting Americans from fraud, while safeguarding against underage and problem gamblers.