UIGEA criticised by media watchdog

[jetset]

UIGEA SLAMMED BY MEDIA WATCHDOG

Not only is the Unlawful Internet Gambling enforcement Act the "stupidest" law passed by Congress...it's also one of the worst!


Congressmen Barney Frank is not alone in his contempt for the US Unlawful Internet Gambling Enforcement Act, which he recently dubbed as the "stupidest law passed by Congress" in his announcement that he will attempt to have it repealed soon. This week he was joined by an influential media watchdog in condemning the UIGEA as a bad law.

Media Channel.org was founded in New York in the year 2000 and concerns itself with the political, cultural and social impacts of the media, large and small. It exists to provide information and diverse perspectives and inspire debate, collaboration, action and citizen engagement and is widely regarded as the first media and democracy "supersite."

The site recently turned the spotlight on the banning of online gambling financial transactions when it published an opinion on what it regards as the worst and best laws...and not surprisingly the UIGEA and a law seeking to control the Internet were among the worst. This is what it has to say about the Unlawful Internet Gambling Enforcement Act:

"This law is a flagship example of how special interest lobbying combined with legislative mumbling can produce an unreadable mess.

"First, the law is written in unintelligible Congress-ese. Second, the law is pockmarked with special interest exceptions, clearly showing who has the best lobbyists. Third, and most importantly, Congress did not specify (in this law or elsewhere) what constitutes illegal Internet gambling, yet the law requires third-party money sources to block the flow of money to illegal gambling operations.

"Thus, as Kafka might write it, Congress deputizes private actors to block illegal activity without deciding for itself what constitutes illegal activity. As a result, banks and other money sources probably will curtail lots of legitimate activity to be on the safe side."

Media Channel reserves the bottom position in the "Worst Laws" category for another Internet-based law - the Communications Decency Act, passed in 1996.

Media Channel opines: "This was Congress’ first comprehensive attempt to regulate Internet content. Not surprisingly, Congress made a lot of rookie mistakes. The CDA tried to keep kids away from Internet porn, a reaction to a sensational 1995 article (the “Rimm Report”) published in the Georgetown Law Journal that proclaimed that the Internet was awash in porn. But later examinations thoroughly discredited the Rimm Report—meaning that Congress’ efforts/over-reactions were based on bad social science.

"Worse, Congress mistakenly assumed that non-porn content could be easily segregated from porn. In defense of this assumption, the government’s expert witness proposed a content-tagging system that would enable browsers to wall off porn. But this exposed a deep flaw in the law: the tagging system didn’t exist, browsers weren’t written to honor the tag, and it turns out that requiring publisher self-tagging for all Internet content is burdensome and cost-prohibitive.

"Because web and email content publishers had no easy way to comply with the law, the law threatened to restrict virtually every Internet speaker. Further, Congress imposed punitive and draconian sanctions (including stiff jail time) for breaking the law. Congress really, really wanted to wipe porn off the Internet, but it chose a particularly mean-spirited way of doing so.

"Not surprisingly, the law fared poorly in the courts. Within a week, it was enjoined. The next year, the U.S. Supreme Court unanimously struck down the law. For its lack of policy support, its sloppy blunderbuss approach to regulating speech, and its flat-out meanness, I hereby crown the CDA the worst Internet law (to date…).

[lots0]

Looks like the tide is rising against the UIGEA...

Thank God.

[sdaddy]

Originally Posted by jetset

"Not surprisingly, the law fared poorly in the courts. Within a week, it was enjoined. The next year, the U.S. Supreme Court unanimously struck down the law. For its lack of policy support, its sloppy blunderbuss approach to regulating speech, and its flat-out meanness, I hereby crown the CDA the worst Internet law (to date…).

Why haven't there been similar court challenges to the UIGEA by now? Where is the ACLU?

[lots0]

Why haven't there been similar court challenges to the UIGEA by now? Where is the ACLU?

Senator Kyle and his cohorts have falsely and cowardly used the "T" word (Terrorist) to describe Online Casinos...

This has scared off (until recently) the folks in the ACLU and others that would have stood against this protectionist law.

But the truth is coming to light... As people find out the truth it makes them angry and gets them active.

Remember to add your voice.... Sign the Petition to Repeal the UIGEA at http://www.thepetitionsite.com/takea...ltl=1177341828

[GrandMaster]

Originally Posted by sdaddy

Why haven't there been similar court challenges to the UIGEA by now? Where is the ACLU?

You may not like UIGEA or how it was passed, but it seems to be within the power of Congress to pass such a law. The CDA fell foul of that thing in 1st Amendment: "Congress shall make no law ... abridging the freedom of speech". There is no constitutionally protected right to gamble.

[sdaddy]

Originally Posted by GrandMaster

You may not like UIGEA or how it was passed, but it seems to be within the power of Congress to pass such a law. The CDA fell foul of that thing in 1st Amendment: "Congress shall make no law ... abridging the freedom of speech". There is no constitutionally protected right to gamble.

Yes, the UIGEA doesn't limit freedom of speech, but I do think it infringes on my privacy rights by instructing US banks to monitor and limit my financial transactions related to online gambling, even though such transactions may not be illegal according to the Wire Act or laws within my state.

[silcnlayc]

WASHINGTON (Reuters) - House Financial Services Committee Chairman Barney Frank on Wednesday said he will introduce a bill this week to lift a ban on online gambling.

"Why anyone thinks it is any of my business why some adult wants to gamble is absolutely beyond me," Frank told a community bankers group conference.

Frank, a Massachusetts Democrat, said he will introduce the legislation on Thursday.

Internet gambling in the United States was effectively banned last October when President George W. Bush signed legislation outlawing gaming financial transactions.

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The ban irked some in the European Union, which is home to online gambling companies that were forced to withdraw from the United States.

Link: http://www.reuters.com/article/polit...43930120070425

[lots0]

Frank, a Massachusetts Democrat, said he will introduce the legislation on Thursday.

Hot Damn... Better get into high gear...

As I write this the petition to repeal has 1170 signatures in less than two days and the petition has not even hit google's index yet...

If you have not singed the Petition to repeal the UIGEA PLEASE do so now!

It does matter, your signature, your opinion counts.

http://www.thepetitionsite.com/takea...ltl=1177341828

[jetset]

TAXATION COULD BE THE QUID PRO QUO FOR A REPEAL (Update)

$20 billion over 5 years is one estimate

Taxation is likely to be the sweetener to get US fellow politicians to support Congressman Barney Frank's attempted repeal of the controversial Unlawful Internet Gambling Enforcement Act this week, according to political observers in the respected Washington publication The Hill.

Congressman Frank is set to give more detail on his repeal proposals at a press conference Thursday, having already said that it is likely to be a difficult task.

There could be a substantial financial incentive in terms of taxation for a repeal move, and as chairman of the Financial Services Committee Congressman Frank, a Democrat, is in a strong position to emphasise the point.

Observers opine that Frank is looking to raise billions of dollars with his new bill, which could be used to pay for expensive tax, healthcare, or other domestic legislation that Democrats are keen to move forward this year in an economy troubled by an expensive war.

The Hill comments that the introduction of the bill and its expected movement in the 110th Congress shows how much has changed in the nation’s capital since the November elections. With Democrats in the majority, the power of social conservatives diminished and new pay-as-you-go rules, supporters of a repeal believe the time to strike is now.

Frank, a longtime critic of regulating Internet gambling, opposes the law on philosophical grounds. He told The Hill: “It’s a terrible idea and there are a large number of people who think it is a terrible idea. I don’t know how it ends. The worst that happens is that enough anti-gambling busybodies will be less inclined to interfere in people’s lives.”

Frank believes that the Republican Party is hypocritical in saying it wants to reduce government intrusion but then passing legislation that regulates certain personal freedoms.

In 2000, Frank said, “It is important that people be able to do what the Republican Party wants them to do on the Internet. If the Republican Party has no objection, then they can do it. But if the Republican Party thinks there are pictures they should not look at, or perhaps booze they should not buy, or bets they should not make, then freedom for the Internet goes away.”

Gambling lobbying groups were more than pleased by Frank’s announcement of his repeal initiative.

“We’re incredibly excited. I’m very interested in what the final version will look like,” Michael Bolcerek, president of the 350 000 strong Poker Players Alliance, said. “But from what we understand, it will do the right thing for poker players and at the same time protect the public interest.”

Bolcerek's group, led by former Sen. Al D’Amato, was formed to overturn the gaming law or obtain an exemption from it for online poker.

Because the [UIGEA] law significantly affects the financial services industry in trying to disrupt US financial transactions with online gambling companies, Wall Street is closely monitoring the Frank bill.

Friedman Billings Ramsey, an investment firm, wrote in a strategy memo that the Frank bill could raise more than $20 billion over five years. The bill is expected to call for the Internet gambling industry to be taxed through a structured system.

The Hill reports that Frank’s proposal could face an uphill battle in the House of Representatives, which passed the stand-alone measure 317-93 last summer. A less stringent version of the bill, attacking online gambling financial transactions, was later attached to an unrelated but must-pass port security measure in a late nigh pre-recess session of Congress. This was signed into law by President Bush.

One of The Hill's sources said that leadership officials in the House are on board with Frank’s plan, though Frank said he did not seek clearance from them.

Several members of leadership voted for the House bill last July, including Speaker Nancy Pelosi (D-Calif.) and Majority Whip James Clyburn (D-S.C.). Meanwhile, Majority Leader Steny Hoyer (D-Md.) voted no, as did Ways and Means Chairman Charles Rangel (D-N.Y.).

Republicans, who spent over six years attempting to pass the Internet bill, are mobilising against Frank’s effort.

“We’re going to fight it,” said Rep. Bob Goodlatte (R-Va.), a leading proponent of the crackdown on Internet gambling. “I’d be surprised if the new leadership would want to bring back an issue that took six years, because of one Jack Abramoff, to resolve.”

In 2000, then GOP lobbyist Abramoff, now a convicted felon, marshaled his conservative allies in the House to defeat a bill that included a ban on Internet gambling.

The proposed repeal could benefit the offshore gambling sites that saw their U.S. customer base disappear when Congress stepped in last year. Hedge funds helped to drive down their stocks in anticipation of the curtailment of online gambling.

The share prices of PartyGaming LLC and 888 Holdings, two online gaming companies that are traded on the London stock exchange, have fallen more than 50 percent since last year. The stocks have started to claw their way back in recent months, as hedge funds and other investors came to believe the government would falter at stamping out such a popular online activity. PartyGaming has seen its stock roughly double in the past three months.

Some U.S. companies also stand to gain from overturning the 2006 law, including Cryptologic, which provides software and services for internet gambling sites, said Andrew Parmentier, a senior analyst at Friedman Billings Ramsey.

Lobbyists for banks and credit card companies that would have shouldered much of the burden of enforcing the gaming crackdown, reacted favorably to Frank’s announcement. “We’d be very pleased to see that law repealed simply because it would remove a potential burden on the financial system and especially on community bankers,” said Steve Verdier, the senior vice president for congressional affairs at the Independent Community Bankers of America.

“We also understand it will be a little bit of a road to get a repeal,” he added.

Some in Congress believe that online gambling should be legalised and regulated on libertarian principles; others resent the way the law was rushed through after midnight without any debate on its merits. It remains to be seen if they have the votes necessary to repeal the UIGEA.

[dhayman]

Great article, and quite encouraging. But, at the end of the day, this bill, in whatever form it arrives in, will need to get through both the Senate and House (a real tough chore). And, even if it does somehow get through Congress, Bush could exercise his veto power to knock it down. There is no way that 2/3's of Congress could overturn such a bill.

With the precedent in place for veto (Bush imminently set to veto the new war funding bill), Bush will have no problem sticking up for his good friend Kyle.

Realistically, I'd give it about a 10 % chance for overturn at this point.