With UIGEA now in effect, Microgaming plans to sneak in through back door

Despite last ditch efforts by some democratic lawmakers, UIGEA is now officially in effect. That means that banks/credit card companies are forbidden from making transactions with offshore gaming companies. The legislation has been on the books since 2005 (when passed in conjunction with the Port Safety Act), but hasn’t actually been made law due to roadblocks put up by major banks complaining that monitoring credit card transactions to offshore destinations would be nearly impossible. Furthermore, a few rank and file democrats have been pushing for repeal of the UIGEA, most notable Barney Frank D-Massachusetts, chair of the house banking committee. Frank and others believe embracing the online gaming market could provide significant tax revenues and employment for the USA.

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Has UIGEA actually stemmed the flow of USA players flocking to online casinos? In our opinion, it has slightly affected traffic, but not to the extent lawmakers intended. There are still many offshore credit card processing agencies that can sneak transactions through, and the minute one goes down there is almost always another that pops up in its place. For the most part, it’s business as usual for online casinos, even with the beginning of summer in the USA, a time that usually means slower business.

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So who is actually in the USA online casinos market still? The major software providers with multiple casinos cater to the USA include Real Time Gaming, Top Game, Rival Gaming, and Vegas Technologies. There are also a few smaller proprietary gaming software companies that operate on a much smaller scale, with no more than one or two casino brands. For the most part, USA law enforcement tolerates these companies, hoping that financial pressures from the UIGEA and banks will eventually put them out of business.

If you’re from Europe, however, things are still the status quo. Big name software provider Microgaming is still the top dog in the show, offering well over 100 casino games. Additionally, many Microgaming casinos accept a wide variety of European banking alternatives, in addition to standard credit card and bank transfer transactions. Companies like Microgaming have successfully reinvented themselves in Europe, after formally leaving the USA market a few years ago – that is, until now.

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Earlier this month, Jaxcasinos.com received email from two major Microgaming operations, Belle Rock Gaming and Casino Rewards, ostensibly announcing the re-entry of Microgaming into the USA facing online casino market, through what was described as a “different platform with equivalent games to the standard Microgaming software offerings”. Many of the finer details are still in the works, including whether or not players who had accounts before Microgaming’s exodus from the USA will be moved over and re-opened. Also, this potentially has a big impact on long standing online casinos affiliates that had USA players blocked from their affiliate stats: now, these dormant player accounts might once again produce income for affiliates that have stuck it out over the past five years.

Essentially, Microgaming’s USA “clone” (as we call it) is creeping in through the back door, hoping to partake in the lucrative USA online gaming market; while not necessarily operating under their prestigious brand name that remains highly regarded and most importantly fully legal in Europe. The actual name of this cloned platform is not officially known at this time, although a few industry insiders have been advised that it is due to launch “very soon”.

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What does this mean for USA casino customers and other USA facing online casinos? Well, they’ve got some new, serious competition for business. Microgaming is easily the world’s gold standard for gaming software, offering enormous progressive slots jackpots, a plethora of table games, and tons of other amusements that most smaller software brands can not afford to maintain. Furthermore, both casino players and affiliate webmasters trust Microgaming infinitely, holding the company in high regard. Payout percentages are closely monitored by third party auditing firms, and individual casino brands are fully vetted and constantly monitored by Microgaming in order to keep a high level of quality and integrity. In other words, players are treated very well and don’t get gypped, while affiliate webmasters can count on regular payments and outstanding support services.

So do the other USA software brands stand a chance? Yes, at least for now. There’s one other 900 lb gorilla lurking in the room, and that’s land based casino companies chomping at the bit to get involved in USA online gaming. It’s well known that Harrah’s, the world’s largest casino group, is all but ready to begin providing customers with online casino gaming alternatives and poker, and is simply waiting for the UIGEA to be repealed along with other regulatory measures. Even though Microgaming and its USA “cloned” platform would represent a huge market share, there’s almost no doubt that high rolling companies like Harrah’s could destroy some gaming software companies overnight, storming into the USA market with billion dollar marketing budgets, top class software, and the trust of millions of players.

What remains to be seen is how Microgaming will negotiate the UIGEA and launch its new platform at the same time. Will they once again provide USA customers with the BEST online gaming experience, much like they did before 2005? The answer is likely a strong “YES”, and that means other companies better watch out even if USA law still remains prohibitive to offshore online casino companies.

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