GPWA Times Magazine - Issue 36 - October 2016

actions. This was a substantial impediment in the implemen- tation of online gaming in New Jersey, because patrons often grew frustrated with their inability to fund their online gaming accounts. Ap- parently, the strictness of Reg- ulation GG and the chill on the marketplace instilled by the Black Friday indictments were enough to scare away many payment processors. To its credit, the New Jersey Di- vision of Gaming Enforcement worked to alleviate these con- cerns. On 15November 2011, the New Jersey Attorney General’s office issued an opinion letter, directed to the state’s Depart- ment of Banking and Insurance, opining that payment processors who processed transactions in connection with New Jersey’s Internet gamingmarket were not running afoul of theUIGEAor any other federal statute. This, along with other efforts by the state to alleviate payment processors’ concerns, helped increase the number of payment processorswho would do business in New Jersey — and therefore increased the available funding pool for online gaming in New Jersey. Thus, in these circumstances, the UIGEA has perhaps gone too far. A statute that was intended to cut off the flow of payments to illegal operators has made payment processing for legal operations more challenging for patrons and more costly to operators. The UIGEA has a “safe harbor” provision that allows a payment processor to rely on a reasoned legal opinion issued by a law firm that a particular set of circum- stances does not violate it. With the hesitation of many in the field to accept payments even on legal online wagering, those with any doubt have been contacting experienced gaming counsel to discuss the legal nuances and to secure comfort that their operations do not violate the UIGEA. Although this is an additional cost of doing business, the safe harbor has added more clarity to what is sometimes an ob- scure and hard-to-understand area of payment processing — and which is likely an un- intended consequence of the UIGEA’s strictness. Some have asked whether, in light of the UIGEA’s strictness, a legislative solution that allows for more flexibility is possible. This is particularly relevant as more states contemplate the in- troduction of Internet gaming and iLottery. There has been talk of a potential federal legis- lative solution with respect to online poker that would create a federal regulatory framework allowing easier sharing of online liquidity and for states to opt in to a federal regulatory system. Counterbalancing these considerations, however, are interests opposed to online gaming and, therefore, to any efforts to make it more accessible. It does not appear that these tensions will be resolved anytime soon, in light of this not being a legislative priority and the strong feelings on both sides of the issue. Solutions or problems? Christopher L. Soriano is a partner in the Cherry Hill, N.J., office of Duane Morris LLP. He concentrates his prac- tice in gaming law, where he represents casino operators, gaming equipment manufacturers, iGaming companies, financial institutions and other participants in the gaming industry in all aspects of their operations. A statute that was intended to cut off the flow of payments to illegal operators has made payment processing for legal operations more challenging for patrons and more costly to operators. Photo by Andrey_Popov/Shutterstock W W W . G P W A T I M E S . O R G 35