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Bankers asked for UIGEA Postponment
11/30/09 - Whilst Congressman Barney Frank, the Poker Players Alliance, Kentucky politicians and various horseracing bodies have received widespread and well deserved plaudits for persuading the Federal Reserve and the US Treasury to postpone the implementation of the UIGEA , it turns out that US financial institutions also played a key role.
The already overworked US financial system is charged with the burden of enforcing the UIGEA, an obligation on which it has expressed concerns at Congressional hearings on the issue, protesting that the lack of precision in the regulations and definitions of illegal Internet gambling present major problems in its enforcement.
Reporting on the issue this week, CreditCards.com notes that the legislation requires banks and credit card networks to navigate "a thicket of confusing and often contradictory definitions and rules." Among other things, it never got around to defining the term "illegal Internet gambling."
CreditCards.com quotes from the official statement of the Fed and the Treasury announcing the postponement and naming among the submissions it had considered Wells Fargo, the American Bankers Association, the Credit Union National Association and a wide range of groups associated with the gambling industry.
"The agencies acknowledge some of the challenges regulated entities are experiencing with the act's definition of 'unlawful Internet gambling," the joint statement by the Federal Reserve and the Treasury Department admitted. "Moreover ..., several members of Congress have indicated interest in revising the Act.
"The agencies are thus persuaded that a limited extension of the compliance date for regulated entities is appropriate," the statement said.
Some Republican lawmakers, however, were less pleased.
"Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises that have long evaded American gambling laws and will continue to do so until effective enforcement is in place," Rep. Spencer Bachus, R-Ala., and Sen. Jon Kyl, R-Ariz., said in a letter to Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke.
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