US Lawmakers Ask to Postpone the UIGEA

December 1 might mean the start of the Yuletide season, but for some, this means the start of the implementation of the financial rules to put in force the prohibition on online gambling.

This implementation is fast approaching, and US Lawmakers are asking the regulators to delay this by about a year.

Reasons Set Forth

The reasons set forth by the US lawmakers are very valid.  For one, pushing for the implementation of the UIGEA on December 1, 2009 will put an undue burden on an already-strained financial situation, especially during the recession which is already creating such havoc in the economy.

Two, the UIGEA never really defined what illegal online gambling means, and instead of coming up with hard facts on what it deems as illegal online gambling, it skirted around the real issue and passed the questions onto the federal and state laws, making the murky water more muddled.

The UIGEA

The Unlawful Internet Gambling Enforcement Act or the UIGEA is an anti-gambling legislation that was passed by congress in 2006, a time when Republicans had control of the House and the Senate.  This law caused financial havoc to European online gambling operators as they lost profits and revenues amounting to billions of euros because of the prohibition of US gamblers to transfer money from a financial institution to their online casino accounts through credit cards, checks, and other forms of electronic payment methods.  But because there were some confusion as to what illegal online gambling means, many online casino operators opted to ban American players from playing at their sites.  They played safe, but lost revenues at the same time.

On September 2008, Barney Frank and his committee has already given their approval on a bill that will overturn the online gambling prohibition, but sadly, measures were not taken to act on the bill when the full House adjourned for the year.  And instead, the Federal Reserve and US Treasury have issued the final rules and stated that companies have only until December 1 to comply, even though there are still some confusion left to straighten out.

The Letter

US House Financial Services Committee Chairman Barney Frank as well as other lawmakers who support the decision to delay the implementation wrote a letter to US Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke, the regulators, urging them to postpone the implementation of the UIGEA for about a year.  Although the letter has already been received and acknowledged, no clear-cut response has been provided by the Federal Reserve yet.  Likewise, the US Treasury has not yet commented on the issue.

TagsBarney Frank, casino, gambling, online casino, online gambling, UIGEA

See also

• WTO and Repeal of the AIGEA Will Bring Pressure to Rid This Prohibition
  Europe is considering bringing a claim under the WTO against the USA for hurting their online casinos.   The AIGEA passage forced many online casinos to prohibit US players from playing on their sites.  Europe has long threatened to do something about this economic threat to their online casinos.  There is strong sentiment that now is [...]
• UK Firms Support Online Gambling in the USA
  The battle of legalizing online gambling in the United States has been happening since 2006 when the Unlawful Internet Gambling Enforcement Act or the UIGEA was passed.  The bill states that transferring money through a financial institution to fund an online gambling account is prohibited and against the law.  But it cannot be denied that [...]