Frank Launches New Attack on UIGEA

14.04.2008, Lesen Sie hier den Bericht über «Frank Launches New Attack on UIGEA».

New bill seeks to stop implementation of unworkable UIGEA regs in its tracks

Following the recent Congressional hearings in Washington on the Unlawful Internet Gambling Enforcement Act, few can doubt that government agencies and the financial services industry required to police it have a monumental task in thinking up practical ways to implement this flawed law passed by Congress in 2006.

This week that task may have been made tougher by new legislation - H.R.5767 - introduced by influential Financial Services Committee chairman Barney Frank and presidential aspirant Ron Paul.

According to a statement from Frank and Paul, HR 5767 introduced this week seeks to prohibit the Federal Reserve Board of Governors and the Treasury secretary from "proposing, prescribing, or implementing any regulation that requires the financial services industry to identify and block Internet gambling transactions."

If approved, the Bill will effectively curtail the further operation of the UIGEA.

Frank's new initiative comes after intense criticism of proposed regulations drafted by government agencies to give teeth to the Unlawful Internet Gambling Enforcement Act, which was designed to disrupt financial transactions with online gambling companies but places the burden of enforcement on the U.S. financial services industry.

Both Congressmen claim the UIGEA unduly infringes upon personal freedoms. "The ban on Internet gambling infringes upon two freedoms that are important to many Americans: the ability to do with their money as they see fit, and the freedom from government interference with the Internet," Representative Paul said.

Critics protest that the UIGEA is impossible to implement due to ambiguities in its language and a serious lack of definition, together with the impracticality of tasking an already stretched financial services industry with its complicated enforcement across a variety of financial and in many cases international instruments.

Congressman Frank has highlighted these flaws, saying: "I believe that even those who agree with it ought to be concerned about the regulations' impact," and pointing out that the recent Congressional hearing had showed that "the regulations are unworkable for the financial services industry."

Federal government executive Louise L. Roseman to an extent confirmed that, warning that banks had expressed uncertainty about implementing the law at the hearing on April 2 (see previous Online-Casinos.com/InfoPowa report) and commenting on the difficulty in drafting effective supporting regulations.

"The payment system, frankly, isn't well designed to be able to identify this activity," Roseman said.

Congressman Frank has another card ready to play in his fight against the UIGEA. His HR 2046 Internet Gambling Regulation and Enforcement Act currently has 48 co-sponsors and seeks to regulate and licence online gambling in the United States, raising tax revenues at the same time as controlling the popular pastime of Internet gambling. If eventually passed, this bill could effectively overturn the UIGEA, although it is still in need of more political support.

A spokesman for the anti-UIGEA pressure group Safe and Secure Internet Gambling Initiative, Jeffrey Sandman applauded the new bill, saying: "The Frank-Paul bill would stop the U.S. government from taking any further steps on regulations that would require all of the country's financial institutions to block Internet Gambling payments."

"It's 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. Further, witnesses representing a broad spectrum of the financial services community unanimously stated that the current ban on Internet gambling is dangerous to the payments system and ineffective in stopping people from using the Internet to play poker, make bets on horses, or engage in other types of wagering."

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