UIGEA Online Gambling Regulations to be Implemented by Bush Admin
The Bush Administration is responsible for passing the UIGEA back in 2006. It was a last minute add on to a port security Bill that had nothing to do with online gambling. In keeping true to form, the Administration now appears ready to implement regulations for the UIGEA just two months before being removed from the White House.
The Treasury Department has had over two years to come up with a plan on how to regulate the UIGEA. They have stalled in their efforts and have come under a wave of criticism from not only the online gaming industry, but also from some of the nations most respected financial institutions.
The opposition to any regulations regarding the UIGEA has been steady throughout the two years since the Bill was passed. There have been recent attempts led by Rep. Barney Frank, to overturn the UIGEA and to regulate the Internet gambling industry in the United States.
The final regulations have now been agreed upon and neither the banks, nor the online gambling industry will be content with the law. The law would make it illegal for banks to process credit card transactions from most Internet gambling sites. The law will allow for horse racing, fantasy sports, and interstate lotteries.
"The problem with the regulations as they will be written, is that banks will not take any chances on what is legal online betting or illegal online betting. That will leave many states that were in favor of these regulations in a sudden crisis," said Tom Brelry, CGW's in house lawyer who has covered and analyzed the UIGEA since its inception.
A state Brelry could have been referring to is Kentucky. They have recently succeeded in seizing the domain names of 141 online gambling site domain names. While the case is still in U.S. courts, Kentucky could be a big loser from the new regulations.
Banks have already spoke about the inability to decipher which is legal online gaming activity and which is not. Many of these banks have threatened that if any regulations are put in place, that they will stop transactions from all online gaming sites. That would include Kentucky's horse racing industry, and many states' legal lottery sales that are done online.
Back in 2006, when the Republican led Congress added the UIGEA to a Bill that had nothing to do with online gaming, it was taken as a parting shot for them losing control of the Congress. Now, two years later, the Bush Administration appears headed toward the same type of parting shot.
The only difference between then and now is timing. The banks cannot afford to spend the kind of money necessary to implement such a ban on Internet gambling at this time. They are already struggling and any added cost could have devastating effects to the futures of these banks.
"If these regulations do get passed and are put in place, we are looking at a major financial crisis for banks and individual states. With the economy already in shambles and so many states relying on gambling revenue from state lotteries, this would be catastrophic for the United States," said Brelry.
Catastrophe is what the Bush Administration has been about for seven years and ten months. At this late stage in the game, there is no reason to believe that in the last two months anything would change, but Brelry summed up the thoughts of many Americans when he said...
"No matter what comes of these online gaming regulations in the final months of President Bush's term, it will only amount to one more mess for the next administration to clean up."
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