You may remember House Financial Services Committee Chair Barney Frank’s attempt to put some logic into the insane US anti gaming law (UIGEA – the one that was snuck into law attached to the terrorist act)? Frank recognises the law for what it is – an ambigous and illogical piece of legislation – and attempts to sort it out.

Frank heard that there are attempts to fast track the regulations (that should have been done over a year ago) to enforce UIGEA so that they are put through before the current incumbent makes way for “change”. He has now written to the Treasury Secretary Henry Paulson requesting he postpone issuing the regulations. Here is the text of the letter:

“Dear Mr. Secretary:

I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations implementing the Unlawful Internet Gambling Enforcement Act. This midnight rulemaking will tie the hands of the new Administration, burden the financial services industry at a time of economic crisis, and contradict the stated intent of the Financial Services Committee

As you know, at our April hearing, the testimony of your representatives and the industry indicated that it would be particularly difficult to craft workable regulations to effectively enforce the statute without having a substantial adverse effect on the payments system. Subsequently, my colleagues and I introduced legislation (HR 5767, later HR 6870) that would prohibit the implementation of these flawed rules and replace them with a formal rulemaking process that would define the term “unlawful internet gambling,” something the proposed rules fail to do. HR 6870 was passed by the Financial Services Committee on September 16. The proposed regulations, like the underlying UIGEA statute, fail to define the term “unlawful internet gambling,” leaving it to each financial institution to reconcile conflicting state and federal laws, court decisions and inconsistent Department of Justice interpretations when determining whether to process a transaction. Furthermore, some of the information needed to make this determination would likely be unavailable to banks because customers or financial institutions in foreign jurisdictions will likely be unwilling or unable to provide it.

I strongly urge you to delay implementation of these major, and deeply flawed regulations to permit the incoming Administration the ability to review the consequences of such a significant policy decision, rather than unfairly being denied that opportunity.”

I have to say that it is refreshing to see Frank’s efforts on this and I wish him every success!

Tags: gambling UIGEA