Online Gambling Banking to Get TighterBy: Adam Baker, Thursday September 30th 2010
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It has not yet been confirmed, but there is an unmistakable buzz at online gambling forums that more stringent controls on electronic transfer of funds are on the cards. As per the existing regulations banks and financial institutions are required to report international electronic funds transfer transactions in excess of $10,000 to the United States federal government. Now it appears that the Obama administration will apply this policy to all international electronic funds transfers, both to and from the United States. This "intrusion into the affairs of citizens" is apparently being justified by the government as essential to prevent terrorist financing and money laundering. These were the very reasons that were cited when the UIGEA was clandestinely ushered in way back in 2006 attached to the Safe Port Bill.
What does this mean for American online casino and online poker players? If an American player transfers funds to an overseas online gambling operator through conventional financial channels then that transaction will be reported to the federal government. Most of such transfers are of much less than $10,000 each and therefore under the prevailing regulations they are not reported. But if the change is implemented overseas electronic transfers of even $100 or less will be reported. Players must also understand what could ensue as a result of this. If a payment processor is under investigation for illegal transactions or worse if he is being prosecuted under the law, then all players whose names are associated with that payment processor automatically become involved. With the new system in place even the smallest transactions will be transparently available to the government.
James H. Freis Jr., the director of the Financial Crimes Enforcement Network in the US Treasury Department, had recently said, "By establishing a centralized database, this regulatory plan will greatly assist law enforcement in detecting and ferreting out transnational organized crime, multinational drug cartels, terrorist financing and international tax evasion." It has been reported that the US federal government is looking at spending over $30 million in setting up the infrastructure to handle weekly reportage from banks and financial institutions of all electronic money transfers into and out of the United States. This move comes at a time when the American financial institutions are already complaining that they are unable to meet the requirements imposed on them as a result of UIGEA.
The American online players have been receiving a spate of bad news lately. Two important cases have not gone favorably in the Supreme Courts of Washington and Kentucky. Barney Frank's bill and other pending legislation are apparently on hold till the mid term elections. And the worse news could be the Republicans coming out tops in the elections.
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