Type of Submission

Refereed Article


On October 13, 2006, President George W. Bush signed the Unlawful Internet Gambling EnforcementAct (UIGEA) of 2006 as anattachment to the Security andAccountability for Every Port Act of 2006. UIGEA is the first federal regulation specific to the online gaming industry. In this article, we examine the impact of UIGEA and its subsequent interpretation (through administrative rulemaking andDepartment of Justice actions) on the value of U.S. publicly traded firms in the gaming industry. We find that UIGEA is associated with an average increase in firm values in the gaming industry of approximately 2.86%. We also find that firms with a greater percentage of revenue from retail gaming gainedmore fromUIGEA. Finally,we document that the JusticeDepartment’s ruling onDecember 23, 2011, that not all gaming on the Internet is illegal, is associated with a positive 3.55% return.We conclude that allowed, regulated, controlled growth of Internet gaming is likely to provide significant value to the U.S. gaming industry.