More Objections To The US Online Gambling Ban - 02-29-08

February 29 - Resistance to implement the Unlawful Internet Gambling Enforcement Act is gaining momentum with numerous objections already submitted to the U.S. Treasury Department. The Federal Reserve has also criticized  the regulations. This week, two more Republican senators raised their fears over the inordinate burden on US financial institutions.

Senators John Sununu and Pete Domenici argue that the regulations are creating too much overhead for banks that will be required to implement measures that ban online gambling transactions. Their objection was addressed to U.S. Treasury Secretary Henry Paulson and Federal Reserve System Board of Governors Chairman Ben Bernanke.

The UIGEA was passed in late 2006 but it took the Bush administration a year to publish proposals that would actually implement the bill. They called for general comment and most has been negative.

The Senators are of the opinion that while the proposals actually contain guidelines, they "...leave sufficient ambiguity as to what sort of transactions are to be blocked. In failing to provide more detail, the proposed rules would inordinately burden every bank, credit union, credit card company, money transmitting business and payment system in the country, leading to non-uniform compliance and confusion.

"This issue is particularly important, as most federal and state gambling laws predate the Internet, and are less than specific as to their application to particular practices or circumstances."

They continue: "The extensive public comments received on this issue highlight the likelihood that risk-averse financial institutions will simply choose to block every transaction that may be interpreted or could resemble gambling, whether legal or not. "Knowing that this is not your intention, we write to urge that any final rules contain a list of restricted transactions and instances that are covered by the law and the corresponding rules.

"As an alternative, we suggest you consider separating the rules into those forms of activities for which there is settled federal law (i.e., defined by the Professional and Amateur Sports Protection Act (PASPA)) and those that are not. This would allow immediate implementation for known activities, while providing greater time to determine what other transactions are to be captured."

Ambiguity? Certainly.

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