Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
UIGEA 2006 – Unlawful Internet Gambling Enforcement Act
Instead of opening its market to foreign online gambling services, the US tightened its restrictions, notably by passing the UIGEA, in 2006.
While the Kyl Bill never became law, it was a precursor to the UIGEA which successfully implemented many of the same restrictions Kyl had originally proposed.
Primarily driven by the ever-persistent Senator Kyl, the UIGEA was initially introduced to the Senate as part of the Safe Ports Act on September 30, 2006.
The bill received limited scrutiny, as it was wrapped (sneakily some might say) into a larger piece of legislation focused on port security. This was seen as critical and achieved bipartisan support.
The 7995 coding in still in place today. The codes are formally referred to as Merchant Category Codes (MCCs). They are defined and maintained primarily by card networks like Visa, Mastercard, and American Express.
MCCs are mandatory four-digit codes and categorize payment transactions based on the types of goods or services the business provides.
7995 is the MCC for Betting/Casino Gambling. This code seems to cover all gambling – not specifically online.
Complete list here: https://docs.stripe.com/issuing/categories
The 7995 code was applied to all credit and debit card transactions related to internet gambling. Banks and credit card companies could now identify – and block – payments they thought were unacceptable. And indeed, they did just that.
Ok, so that must be it then? If operators can’t accept payments by card, does that mean the end of the industry?
No, of course not…
The UIGEA was approved, by both the House of Representatives and the Senate, before being signed into law by President George W. Bush on October 13, 2006.
UIGEA made it illegal for financial institutions to process transactions related to online gambling; effectively choking off the ability for US customers to participate in most forms of online gambling.
Many operators that depended on US customers were hurt badly. The traditional forms of money wire services would no longer transmit customer payments and banks were under notice.
The UIGEA mandated that financial institutions and payment processors use specific codes to identify transactions associated with gambling. The 7995 code is a merchant category code (MCC) designated for internet gambling transactions.
The goal was to facilitate the identification of gambling-related transactions, making it easier for banks and financial institutions to monitor and block illegal gambling payments.
However, the implementation of this coding system was complicated by the fact that not all gambling activities were illegal; for example, transactions for legal state-run lotteries or certain forms of gambling might still occur. This led to challenges in accurately blocking only illegal transactions while allowing legal ones to proceed.
