Online gambling's arch enemy, Senator Jon Kyl  of Arizona, appears to have little regard for the practical difficulties surrounding the implementation of his Unlawful Internet Gambling Enforcement Act, judging by reported comments he made this week. The UIGEA, tacked onto a totally unrelated security bill,  was passed in a late night, pre-recess session of Congress in October 2006, with a requirement that federal bureaucrats draft supporting regulations within 270 days.

Despite causing costly withdrawals from the US market by online gambling companies, UIGEA remains unsupported by the essential regulations, which officials are struggling to draft. The financial industry which will be required to do government's job in enforcing the regulations has been highly critical of the impractical and vague proposals offered thus far, and the project has gone significantly over the Congressional deadline.

This week the Las Vegas Review-Journal quoted Kyl as saying that he is losing patience with the Federal Reserve and the Department of Treasury as they continue to wrestle with the complexities of crafting sensible regulations to enforce the UIGEA, which seeks to disrupt financial transactions with online gambling companies.

Kyl said the regulations are a year overdue, according to the 2006 prohibition statute. “The longer it goes the less certainty there is,” said the Senator. “I mean, the people who are violating the law need to know that they're not going to be able the get away with it, and I think that the failure to get these regulations promulgated on time has perhaps given some hope, and it's given life even to an idea over in the House of Representatives to put a moratorium on the regulations.”

Kyl was referring to a bill introduced April 11 by Congressmen Barney Frank, chairman of the House Financial Services Committee, and Ron Paul, a Texas Republican. The Frank-Paul HR 5767 bill is designed to block the Federal Reserve and Treasury Department from completing regulations to enforce the ban, and has already attracted support from at least ten other politicians.

In a financial services subcommittee hearing April 2 Federal Reserve and Treasury Department officials admitted the regulations are proving to be a serious problem, partly because the 2006 legislation does not define unlawful Internet gambling. Louise Roseman, director of bank operations and payment systems for the Federal Reserve, testified that the prohibition of Internet gambling financial transactions cannot be “ironclad.”

Kyl is probably also looking over his shoulder at another bill – HR 2046 – proposed by Congressman Frank and currently supported by 48 other Congressman.  The Internet Gambling Regulation and Enforcement Act seeks to license and regulate online gambling in the USA, and has the potential to dismantle the UIGEA further.

Kyl is apparently not worried by these proposals, saying: “I would be concerned if something like that were to be adopted by the House … I'm not sure that the momentum is there to actually get it done.”

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