UIGEA Delayed 6 Months by Congress

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US delays crackdown on Internet gambling
(AFP) – 1 day ago
WASHINGTON — The US Treasury Department and Federal Reserve Board delayed for six months on Friday the enforcement of new rules designed to crack down on Internet gambling.
In a joint statement, the Treasury Department and Federal Reserve said US financial institutions were being given until June 1, 2010 to be in compliance with the Unlawful Internet Gambling Enforcement Act.
The act, which would ban US banks, credit card and financial companies from handling unlawful Internet gambling bets, had been scheduled to take effect on December 1.
Passed in 2006 under president George W. Bush by the then-Republican controlled US Congress, the act has been the target of criticism from financial institutions and others that it would be an enforcement nightmare.
It prohibits financial institutions from knowingly accepting payments for online gambling made through credit cards, electronic funds transfers, and checks.
It was aimed at putting teeth into a de facto ban on US residents placing online wagers in locations such as Britain, Canada, Antigua and Gibraltar.
The US ban on Internet gambling has been challenged as an unfair trade restriction at the World Trade Organization and a US congressman is seeking to overturn the 2006 act with legislation that would allow online gambling.
The congressman, Democratic Representative Barney Frank of Massachusetts, welcomed the six-month delay by the Treasury and the Federal Reserve.
He said they "deserve a great deal of credit for suspending these midnight regulations promulgated by the Bush administration which would curtail the freedom of Americans to use the Internet as they choose and which would pose unrealistic burdens on the entire financial community.
"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," Frank said in a statement.


AFP: US delays crackdown on Internet gambling

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Treasury, Fed delay Internet gambling ban 6 months

Fri Nov 27, 2009 4:06pm EST

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By David Lawder
WASHINGTON (Reuters) - The U.S. Treasury and Federal Reserve on Friday delayed the implementation date for a new Internet gambling payment ban for six months, a move that gives lawmakers time to overturn it or end confusion over illegal practices.
In a joint statement, the Treasury and Fed said the December 1 implementation date for the law passed in 2006 would not be achievable for some financial institutions. They set a new compliance deadline of June 1, 2010.
"Commentators expressed concern that the act and the final regulation do not provide a clear definition of 'unlawful Internet gambling,' which is central to compliance," the two agencies said.
In addition, they said certain members of Congress have "expressed an intent to consider legislation that would allow problematic aspects of the act to be addressed."
The 2006 law, which cost European Internet gambling companies billions of euros in lost market value, prohibits credit card, check, and electronic fund transfer payments by U.S.-regulated financial institutions in connection with "unlawful Internet gambling."
But rather than define what types of gambling are illegal online, the bill relied on existing federal and state laws to answer that question. It also still allowed any online horse race betting permissible under the Interstate Horseracing Act of 1978.
FRANK SEEKING TO OVERTURN BAN
Congress passed the anti-gambling legislation in 2006, when Republicans still controlled both the House and Senate. The final regulations issued to enforce the ban were issued by the Treasury and Fed just before former President George W. Bush left office in January.
Representative Barney Frank, who chairs the House Financial Services Committee, in October urged a 12-month delay in the implementation because of confusion over what kinds of online gambling were illegal under the bill.
Frank's committee in September 2008 passed a bill to overturn the ban, but the full House never acted on the measure. Frank earlier this year reintroduced the bill, which would effectively overturn the ban and create a framework for the Treasury to license Internet gambling operators, collect taxes from them and enforce rules for transparency.
On Friday, Frank praised the Treasury and the Fed for delaying the regulations, which he said would "curtail the freedom of Americans to use the Internet as they choose" and put unrealistic burdens on financial institutions.
"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," Frank said in a statement.
Frank has scheduled a hearing next Thursday on the legislation, dubbed the "Internet Gambling Regulation, Consumer Protection and Enforcement Act."
The six-month delay will allow banks to establish policies and procedures to require gambling businesses to document the legality of their activities, the Treasury and Fed said.
(Editing by Kenneth Barry)


Treasury, Fed delay Internet gambling ban 6 months | Technology | Internet | Reuters