August 29th, 2008
excerpt:
This fall the House Financial Services Committee is finally expected to release its regulations for the Unlawful Internet Gambling Enforcement Act, which was signed into law in 2006; banks are anxiously awaiting clarity on a number of fronts, particularly what will entail illegal gambling and what happens if they mistakenly block legal transactions.
The issues are so thorny that House Financial Services panel Chairman Barney Frank (D-MA) and Rep. Ron Paul (R-TX) introduced legislation designed to delay the implementation of said regulations, but the committee rejected the bill during the summer.
This leaves U.S. banks in a quandary. As it stands, Internet gambling is defined as gambling done through the Internet. The problem with that broad definition is there are legal gambling venues on the Internet such as fantasy sports’ sites, Off-Track Betting for thoroughbred and harness racing, and online lotteries.
But worse than the broad definition of what’s illegal, is that the law deputizes the banks to police the activity. “The biggest problem with the law is that it converts banks from being providers of services into becoming law enforcement entities,” says Wayne Abernathy, evp for financial institutions policy for the American Bankers Association. “Banks just aren’t equipped to do that and-in particular with this law-we not only become the police force, we also become judge and jury.”
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Dealt a Bad Hand - 09..2008 - U.S. Banker Article
Author Contact Info: Anthony Malakian, U.S. Banker
Tags: UIGEA
