The passing of the Unlawful Internet Gambling Enforcement Act has some analysts wondering how the U.S. Treasury Department and Federal Reserve thinks they are going to enforce the processing of financial transactions sent to and from online casinos, sportbooks and poker rooms. Banks and third party financial institutions are all eagerly awaiting the verdict, which must be decided within the next nine months.

Since payment processors who essentially exist off of the online gambling industry, like Neteller and Fireone, are foreign entities, it may be impossible for U.S. regulators to try and stop bettors from using these services, short of writing regulations that would require federal banks to cease doing business with them. Additionally, Automatic Clearing House (ACH) payments still remain un-coded, which could very well become the vehicle of choice for U.S. bettors seeking to deposit and withdraw betting funds over the internet. Business continues as usual, and many gaming operators are hopeful there will be ways around compromised U.S. regulations and policy that is impractical to enforce on several fronts.

Aside from a handful of gaming operators no longer accepting U.S. players - the question still lingers in the air: How will payment processors like Neteller continue to do their own business, which many online casinos are dependent on for signing real money account holders based in the U.S.? Even after consultation with internet payment processing experts, the issue still casts a grey shadow of uncertainty, albeit most agree there will be a way for payments to keep taking place.

The Unlawful Internet Gambling Enforcement Act of 2006 does indeed call for a severing of ties between online casino sites and electronic payment processors. The first step in doing so is for the U.S. Treasury Department and Federal Reserve to create legal guidelines for banks and third-party financial institutions to follow in regards to blocking transactions to and from illegal online gambling sites. There is a nine month period allotted to create these regulations, which many experts say will likely use up this entire window of time considering the issue is such a tricky matter.

The bill itself does not cover all types of electronic transactions, and in fact, actually permits the Federal Reserve to exempt certain types of transactions which pose a difficulty in identifying those used to transfer funds from or to online gambling operations. For instance, Automatic Clearing House payments (ACH) are often accepted at online casinos. These types of transactions are difficult to track for they are non-coded, unlike credit card transactions, which can be identified by a code of digits revealing the transaction's nature. For those credit card transactions used to fund an online casino, poker room, or sports betting account, the infamous code of "7995" shows up, thus prompting banks to not honor the transaction.

While banks have the technology to begin coding ACH payments, the language of the bill prohibits the Treasury Department from telling banks they must do so. At this stage, the only alternative appears to be regulations requiring banks to severe their ties with payment processors like Neteller and FireOne.

However, some experts do not think that U.S. Federal regulators can and will go this far. Neteller is a foreign company, and many U.S. banks deal with numerous foreign banks.  The line of international financial connections is already easily blurred, and there simply are some things the U.S. government cannot do to keep banks from doing business overseas, aside from cutting themselves off from world trade. In the end, most analysts agree there will be a way for payment processors to sidestep whatever regulations the U.S. attempts to enforce.

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