by David Stratton | Representatives of the banking industry and federal regulators told the House Services Committee on Wednesday that the Unlawful Internet Gambling Enforcement Act is flawed legislation at best, and most likely unenforceable as intended.
Enacted last October, the UIGEA requires financial institutions to weed out and intercept illegal gambling bets placed by people in the United States. The Congressional committee was to hear testimony on the proposed rules that will be used to enforce the UIGEA.
Instead, it turned into a forum on how the UIGEA was so poorly written that it was unclear as to what constituted "illegal" online gambling, and that it was "folly" to charge the banking industry with a task that federal law enforcement agencies could not do.
"There is no question that prosecuting unlawful Internet gambling poses numerous law-enforcement challenges," said Wayne Abernathy of the American Bankers Association, which represents 95 percent of the nation’s banks. "Unfortunately, the statute as enacted and the regulations proposed are both burdensome and unworkable and unlikely to result in stopping illegal Internet gambling."
Even representatives of the U.S. Treasury Department and Federal Reserve System – agencies charged with creating the regulations that banks will have to follow – told legislators that it wasn’t reasonable to expect banks to enforce laws that were unclear at best.
"The most prominent concern is the lack of clarity of what forms of gambling are unlawful," said Louise Roseman, director of bank operations for the Federal Reserve System. "The payment system isn’t well-designed for this task, and that’s what we’re struggling with."
For the complete story, including additional testimony before the House Services Committee, see next Tuesday’s GamingToday newspaper.