UIGEA regulations proposed

[Mousey]

Nelson Rose on the proposed regulations...

Proposed Internet Gaming Regulations And Players
Gambling and the Law®

The federal government has issued proposed regulations to enforce the ban on money transfers for unlawful Internet gambling transactions. The most important thing for online poker players to know is that nothing has changed. And nothing will, for many, many months.

The proposed regs are the result of a bill rammed Congress through last year. Then Senate Majority Leader Bill Frist (R.-TN) attached his Unlawful Internet Gambling Enforcement Act to the SAFE PORTS Act. Frist refused to let Democrats even read the bill. If they didn’t like it, they could vote against port security.

A good indication of how quickly the law was written is that it does not even have a good acronym. Since UIGEA is unpronounceable, I’ll call it Prohibition 2.0.

Prohibition 2.0 is often characterized as outlawing Internet gambling in the U.S. Although it scared the bejesus out of publicly traded companies, it actually does only two things: It creates one new crime, being a gambling business that accepts money for unlawful Internet gambling transactions, and it calls for new regulations for banks and other payment processors.

What it doesn’t do is make it a crime to play poker on the Internet. It doesn’t directly restrict players from .....

[lojo]

Thanks for finding that Mousey, I wish he would write more often

But, in the end, Prohibition 2.0 and its regulations will be as successful in preventing people from gambling and playing poker online as the first Prohibition was in preventing people from drinking.

[Mousey]

Another interesting article...

Internet Gambling Act Should Be Scrapped: Joe Saumarez-Smith

By Joe Saumarez Smith

Oct. 19 (Bloomberg) -- A year ago last Saturday, President George W. Bush signed the Unlawful Internet Gambling Enforcement Act and online gambling was banned in the U.S.

At least, that was the intention. Twelve months later, there are just as many people gambling online, if not more. Many bettors don't even know the law was changed, partly because it was tacked on as an amendment to a measure aimed at increasing port security.

The biggest difference now is that the companies offering online gambling are privately held and operate out of countries where it is impossible to know who controls them; if you had a huge win, then the risk of not being paid is probably much higher. The major public companies that used to offer online betting to Americans, such as PartyGaming Plc, 888 Holdings Plc and Sportingbet Plc, all quit the U.S. market ....

[lojo]

I'll give an opinion

[Mousey]

Has anyone seen or heard the banks/financial community's reaction to the UIGEA proposed regs?

Meanwhile... an editorial...

Effective regulation should be goal for online gambling
Editorial
RENO GAZETTE-JOURNAL
Posted: 10/30/2007


If the Internet really is the Wild Wild West, then it's appropriate that poker is its leading game.

It's also appropriate that Congress wants to send in the marshal to shut down the illegal games that are raking in money faster than you can say, "Bat Masterson!"

Ideally Congress should do for Internet gambling what Nevada did for casino gambling more than 75 years ago. By legalizing gambling in the state, Nevada turned from the reactive model prevalent in most states -- in which law enforcement concentrated on closing down illegal games -- to a proactive model: It allowed just about anyone...

**

And the Safe and Secure Internet Gambling Initiative has a press release out....

Net Gambling Rules An Unfair Burden On U.S. Banks, Group Complains

[jetset]

This assessment is the latest:


WASHINGTON, D.C.

U.S. financial institutions would face a variety of regulatory burdens to prevent the processing of prohibited Internet gambling transactions under the proposed rules to implement the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) according to a new analysis.

According to the advisory "Proposed Internet Gambling Regulation Would Require New Policies and Procedures for the U.S. Payment Systems," by the national law firm Alston & Bird, U.S. residents would be able to circumvent the proposed regulations and continue to gamble online by processing financial transactions through a foreign bank account in a jurisdiction where Internet gambling is legal.

The challenge U.S. financial service firms face is that enforcement of UIGEA will be very difficult and burdensome. "The proposed rules create an unprecedented and unwieldy regulatory burden on the U.S. financial services sector," said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

"U.S. financial service companies are being left to interpret ambiguous State and Federal gambling laws, which do not clearly differentiate between legal and illegal Internet gambling activities or transactions, and then implement unreasonable and costly solutions to achieve compliance."

The advisory provides an overview of the proposed regulation and raises concerns about regulatory burden due to the impact of implementation costs on U.S.-based payment service companies and ability for U.S. resident to be able to still gamble online after adoption of the rules. U.S. financial service companies with concerns about potential burdens and compliance exposure are encouraged to submit comments on the draft rules published on or before December 12, 2007.

Legislation to regulate and tax Internet gambling would provide a rational and safe approach to allow Americans to gamble online. "Rather than waste valuable resources attempting to enforce the Unlawful Internet Gambling Enforcement Act, a flawed law that erroneously presumes prohibition will keep millions of Americans from gambling online, the U.S. should instead regulate and tax Internet gambling," added Sandman.

Congressman Barney Frank (D-MA) and Jim McDermott (D-WA) have introduced the Internet Gambling Regulation and Enforcement Act and Internet Gambling Regulation and Tax Enforcement Act, companion pieces of legislation, to regulate and tax Internet gambling activity.

The proposed legislation 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. Taxation of Internet gambling is expected to generate between $6 billion and $25 billion in revenues for the U.S. Treasury in the first five years of enactment.

The Alston & Bird advisory is available at http://www.alston.com/files/Publicat...02-74cbe4b57fe 3/Presentation/PublicationAttachment/5f828ec2-97b5-4087-a34d-7ef0687d39b5/2 007%20Internet%20Gambling%20Advisory.pdf.

[lots0]

Has anyone seen or heard the banks/financial community's reaction to the UIGEA proposed regs?

I looked (real quick) and could not find anywhere the Banks have made public comment.

But knowing human nature as I do... What would you do you if the Government granted your business unprecedented power to know everything about everyone that does business with you and block their financial transactions at will, without any accountability? Would you bitch and complain about all the hassles or would you dig in and get to work gathering up and getting control of all that power???

I know what I'd do.

[USA2112]

This whole issue surrounding the UIGEA has been nothing more than wasted paper thrown on the table by this administration and an insult to the American peoples intelligence. I'm just glad we have congressman Barney Frank and others who are willing to fight against this bill and do what’s right.

My opinion is, The government has known all along this bill will be repealed at some point, their just stalling for time. The UIGEA is nothing more than an attempt to stop money from going out of the USA to other countries that are easier to own and operate online casinos. The USA had no laws and regulations for businesses like online casinos or took the initiative to create them and decided to hide the UIGEA as they did. Try and stop the money flow.

I think anyone could agree that if the government put the same effort as they have with the UIGEA into creating the necessary laws to legalize online gambling in the USA the law would have passed full steam and would be done with and they would be getting their fair share of the profits story over. But instead they decided on taking the long road to riches once again. Not to smart considering their wasting tax payers money that could be used on something with a little more merit.

The whole quagmire their throwing at the financial institutions is even more ridiculous, expecting them to understand legislations that are not clearly laid out and possibly face penalties themselves I’m sure for not following the stringent guide lines just don’t make sense.

It seems the only part of the UIGEA that has made any sense all along has been the part to protect against underage and compulsive gambling.


I just hope this is all over soon! so I can play some microgaming again.

[jetset]

FLAK FOR PROPOSED UIGEA REGULATIONS

"....the entire set of policies and procedures would be useless, lack practical utility."

US government officials, who were tardy in releasing the first drafts of the regulations giving teeth to the Unlawful Internet Gambling Enforcement Act, have given interested parties until December 12 to comment, and the public criticism has not been slow in coming.

This week the Center for Regulatory Effectiveness, a D.C.-based lobby group headed by former Office of Management and Budget executives released a report in response to the proposed regulations, which were submitted well after the Congressional deadline of 270 days by the Treasury Department.

The UIGEA seeks to disrupt financial transactions with online gambling companies, and the CRE focused mainly on the fact that the Treasury has not provided "objective, supported estimates" of the burden that the proposed regulations could have on impacted groups such as small businesses. These estimates are required in terms of the Paperwork Reduction Act, the CRE points out.

The lack of clarity on what gambling transactions are permissible is also criticised as increasing the burden on companies required to enforce the regulations.

"The [US government] agencies have declined to state which Internet gambling transaction are unlawful and have recognized the difficulty of doing so for reasons including 'the fact that the legality of a particular Internet gambling transaction might change depending on the location of the gambler at the time the transaction was initiated, and the location where the bet or wager was received,'" the CRE highlights.

Although the agencies are not required to list a set of restricted transactions, the proposed rule in reality requires designated payment systems and non-exempt processors to determine what is and is not a restricted transaction in each jurisdiction in which they do business.

"Without such a determination, which underlies all identification and blocking tasks, the entire set of policies and procedures would be useless, lack practical utility and, thus, could not be approved by OMB (the Office of Management and Budget)," the CRE report concludes.

[jetset]

U.S. TREASURY UPDATES ON UIGEA REGS

Exemptions generally extend to the gambler's bank

U.S. Treasury Deputy Assistant Secretary Valerie Abend outlined exemptions on the government's attempt to disrupt financial transactions with online gambling companies under the Unlawful Internet Gambling Enforcement Act today (Wednesday).

Giving an update on the much delayed regulations supporting the unpopular Act, Abend told Dow Jones that officials were still working to finalise a new rule that would put the onus on banks to help crack down on online gambling by U.S. citizens.

A public comment period on the proposed rule is scheduled to close December 12, and Abend said the U.S.Treasury is expecting a large number of responses and would have to provide analysis and reasons for any decisions based on the comments received.

In prepared remarks, Abend said banking regulators are focusing their efforts on banks that do business with gambling companies, as well as the interaction between U.S. banks and foreign banks that may be tied to online gambling.

Legislation passed by U.S. lawmakers last year required Treasury and the Federal Reserve to enact regulations aimed at preventing the flow of funds from gamblers to Internet gambling sites. The recent introduction of a proposal on the regulations was significantly over the 270 day deadline for this task imposed by Congress in October last year, and has been greeted with significant criticism.

Included in the [UIGEA] legislation are exemptions for certain financial institutions where it is "not reasonably practical" to prevent illegal internet gambling. Abend said such exemptions would generally extend to the gambler's bank, but not banks that do businesses with firms that offer illegal gambling.

"In the case of checks, the check collection system is highly automated and it is not reasonably practical for the gambler's bank to know whether a check presented to it for payment involves unlawful Internet gambling," Abend said.

Conversely, she said, a gambling business' bank or the first U.S. bank to receive a check under the proposed rule would be required to have policies and procedures in place to stop the processing of a check.