UIGEA Rules Finally DeferredBy: Mark Freedman, Monday November 30th 2009
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The rumors last week that the implementation of the UIGEA rules will not be enforced from December 1, 2009, were confirmed when the United States Treasury and the Federal Reserve issued a joint statement to that effect.
The joint statement referred to several of the objections that had been raised against the UIGEA rules. One of the main reasons was that it was widely felt that the rules did not provide a clear definition of unlawful Internet gambling. The Treasury and the Federal Reserve also referred to letters received from some members of the Congress who had written to say that legislation was in process to deal with the problematic aspects of the rules. Finally the two implementing agencies of the UIGEA rules said that the financial institutions were not prepared with the mechanisms they needed to block unlawful Internet gambling transactions. In light of the above problems the implementation of the UIGEA rules was deferred to June 1, 2010. According to the Treasury and the Federal Reserve this was sufficient time for the legal and legislative issues to be resolved and also for the financial institutions to have their systems in place.
The postponement was greatly appreciated by the supporters of online gambling. House Financial Services Committee chairman Barney Frank has two of his sponsored bills coming up for hearing on December 3. Frank said, "This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law." The Interactive Gaming Council (IGC) has also been in the forefront of the legal fight against the banning of online gambling. IGC Chief executive John Kennedy FitzGerald said, "IGC hopes that the U.S. Congress will use the intervening time to move U.S. law away from the ambiguous attempts at prohibition contained in UIGEA, and toward a rational policy of licensing and regulation…" FitzGerald was also appreciative of the role played by Barnet Frank in securing the postponement.
Whereas the efforts of Barney Frank, the Poker Players Alliance (PPA) and the IGC have been visibly publicly, the deferral would not have been possible without the behind the scenes moves made by the financial institutions. The official statement issued by the government agencies referred to submissions from Wells Fargo, the American Bankers Association and the Credit Union National Association.
Not everyone has expressed pleasure at the deferral. Those who opposed the deferral included Republicans Spencer Bachus and Jon Kyl. They said, "Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises." The next battle in the war is set for December 3.
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