Staff & Wire Reports | In the wake of Congressional hearings on the Internet gambling ban, legislation was introduced last week that would suspend enforcement of the Unlawful Internet Gambling Enforcement Act (UIGEA) passed in 2006.
Introduced by Reps. Barney Frank (D-Mass.) and Ron Paul (R-Texas), the legislation, H.R.5767, would prohibit the Department of the Treasury and Federal Reserve System from proposing, prescribing or implementing any regulations related to the UIGEA.
"The Frank-Paul bill would stop the U.S. government from taking any further steps on regulations that would require all of the countrys financial institutions to block Internet Gambling payments," said Jeff Sandman, spokesman for The Safe and Secure Internet Gambling Initiative (SSIGI), an organization devoted to promoting Internet gambling regulation. "Its a bold move, but a necessary one, in light of the warnings from the Treasury and Federal Reserve that they did not know how to write regulations to solve the problems created by UIGEA."
Testimony before the House Financial Services Committee two weeks ago suggested that financial services institutions would face serious regulatory burdens in attempting to enforce UIGEA and related regulations, which is unlikely to stop millions of Americans from gambling online.
Representatives of the banking industry suggested the law is ambiguous and allows for multiple interpretations of what may or may not be illegal activities.
Frank introduced legislation last year, the Internet Gambling Regulation and Enforcement Act (H.R. 2046), that would regulate Internet gambling. The bill would require licensed Internet gambling operators to put in place safeguards to protect against underage and compulsive gambling and ensure the integrity of financial transactions.
A companion piece of legislation to the Frank bill introduced by Rep. Jim McDermott (D-WA), the Internet Gambling Regulation and Tax Enforcement Act of 2008 (H.R. 5523), would ensure the collection of taxes on regulated Internet gambling activities. According to a tax revenue analysis prepared by PricewaterhouseCoopers, taxation of regulated Internet gambling could generate between $8.7 billion to $42.8 billion in federal revenues over its first 10 years.