UIGEA Hearing: Enforcing Vague UIGEA Is a Struggle Say Feds

The Associate Press released a commentary about testimoney at Wednesday's US Congressional hearing on implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which in summary describes how officials from Treasury and the Federal Reserve testified that they are so confused about what the "unlawful" part of UIGEA means, that it is unusually hard for them to figure out how to implement it.

Here is the entire AP release, authored by Erica Werner:

WASHINGTON (AP) - Congress' ban on Internet gambling is so vague that figuring out how to enforce it is a struggle, say federal officials charged with the task.

"I think it is very difficult without having more of a bright line about what is intended to be unlawful Internet gambling," Louise Roseman, head of the Federal Reserve's bank operations division, told a House hearing Wednesday.

"The challenge we have is interpreting something, particularly federal laws, that Congress itself isn't sure what they mean," she said.

Congress passed the ban with little notice in 2006 when Senate Republicans, pushed by then-Majority Leader Bill Frist, attached it to an unrelated port security bill in a rush of year-end legislation.

Internet gambling already was considered mostly illegal in the U.S., but the games are played by many U.S. residents on sites hosted overseas in a business worth more than $15.5 billion a year. U.S. bettors have been estimated to provide at least half that revenue.

The congressional ban sought to explicitly outlaw Internet gambling but didn't offer a clear definition everyone could agree on, instead referring to existing federal and state laws which themselves provoke differing interpretations. It put the burden on financial institutions by prohibiting them from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers.

That's led to complaints from the financial services industry about the difficulty of determining where payments are going, especially because online betting businesses can disguise themselves with relative ease.

It "makes financial institutions the police, prosecutors, and judges in place of real law enforcement officers," Wayne Abernathy of the American Bankers Association told a House Financial Services subcommittee Wednesday.

Regulations proposed by the U.S. Treasury and the Federal Reserve last fall would apply to the gambling business' bank- generally not to the gambler's bank- and require it to use due diligence to ascertain the nature of its customer's business and ensure it is not processing illegal Internet gambling payments. The regulation doesn't attempt a definition of illegal online gambling, since Congress didn't give one.

The regulations have drawn numerous comments from agitated bankers, poker players, and others. Officials from Treasury and the Fed both testified Wednesday to challenges in finalizing the regulations.

Poker players contend they're not covered. Horse-racing was exempted by Congress, yet without settling definitively whether online wagering on races breaks the law.

"A rather bizarre piece of legislation," said House Financial Services Committee Chairman Barney Frank, D-Mass., who has introduced a bill to overturn it.

The law has caused international disputes, including an investigation launched earlier this month by the European Union after European betting companies complained that Washington's actions against them were infringing world trade rules. In the United Kingdom and some other countries, Internet gambling is largely legal.

Nevada's casino industry is neutral on the regulations, supporting a bill written by Rep. Shelley Berkley, D-Nev., that would require a study of online gambling.

(This version updates an earlier released version, which CORRECTS in 3rd paragraph to 'itself' instead of 'themselves' CORRECTS spelling of horse racing.)

More Poker News Articles

Keikoan Captures Harvey's Lake Tahoe WSOPC Championship
12am Thu Nov 19th, 2009

This week marked the finale of the biggest annual tournament series in Northern Nevada, the WSOP Circuit championship at Harvey's Lake Tahoe. While the Main Event saw only a modest turnout, it did boast of a tough final table, and a WSOP bracelet owner as the eventual champion.

WSOP Main Event Champ Joe Cada to Appear on Letterman
12am Wed Nov 18th, 2009

The poker world will receive some late night attention tonight as "The Kid" Joe Cada, the youngest champion in the four decade history of the World Series of Poker Main Event, takes a seat next to embattled talk show host David Letterman.

First Korean Champ of Asia Pacific Poker Tour Crowned in Cebu
12am Tue Nov 17th, 2009

Another stop on the Asia Pacific Poker Tour is in the books, this time it's the APPT Cebu in the Philippines, and for the very first time a Korean player has come out on top.

Pollack Done as Commish of World Series of Poker
12am Sat Nov 14th, 2009

Just three days after crowning Joe Cada as the 2009 Main Event champion, officially closing the special 40th anniversary run of the World Series of Poker, Jeffrey Pollack has resigned his post as Commissioner of the WSOP.

Durrrr Signs as Team Full Tilt's Youngest Member
12am Wed Nov 11th, 2009

Tom "durrrr" Dwan is the newest member of Team Full Tilt, the online site's highest level of affiliation. At 23, Dwan is the youngest of the now 14-person team. The high stakes cash phenomenon was nominated for induction this year into the Poker Hall of Fame until the Hall of Fame Governing Council decided he was too young to meet the "has stood the test of time" qualification.

Joe Cada Becomes Youngest World Series of Poker Main Event Champ
12am Tue Nov 10th, 2009

History was made early Tuesday morning in Las Vegas as 21-year-old Joe Cada outlasted Darvin Moon in heads-up play to claim the 2009 World Series of Poker Main Event bracelet and more than $8.5 million.

Moon and Cada Heads-Up, Ivey 7th at WSOP Main Event Final Table
12am Sun Nov 8th, 2009

After a marathon session at the most esteemed table in the poker world, a 21-year-old and a logger are set to go one-on-one for the World Series of Poker Main Event bracelet.

PokerStars Launches New UK and Ireland Poker Tour
12am Wed Nov 4th, 2009

PokerStars.com has announced the start of a new poker tour with stops throughout the United Kingdom and Ireland. The UK and Ireland Poker Tour (UKIPT) will kick off in Galway, Ireland in mid-December, and the first event in the UK will be held in Manchester in February.

Peerless Media Agrees to Purchase World Poker Tour Enterprises
12am Mon Nov 2nd, 2009

According to a Monday press release, WPT Enterprises Inc., mothership of the World Poker Tour, is now the rightful property of Peerless Media, Ltd., subsidiary of online giant PartyGaming.

Tiffany Michelle and Maria Ho Hit the Amazing Race Rail
12am Mon Nov 2nd, 2009

After surviving six legs of the Amazing Race by the skin of their teeth, poker pros Tiffany Michelle and Maria Ho were finally eliminated in the CBS reality show's most recently aired episode. Michelle and Ho, the last women standing in the 2008 and 2007 World Series of Poker Main Events, gave reality television fans another chance to watch poker personalities compete away from the felt. Annie Duke garnered quite a following earlier in the year on another reality show competition, NBC's Celebrity Apprentice.