Nov 13, 2008 : Internet Gambling Bill Sparks Debate

📅 November 13, 2008 - Issuing a final regulation this week aimed at banning Internet gambling by stopping money transactions, the US Republican government has been met with criticism for placing the burden on financial institutions.


According to reports from major news agencies including the Washington Post, the Unlawful Internet Gambling Act, spanning 120 pages, details how banks must identify and block illegal online gambling transactions starting as soon as January, prohibiting them from accepting payments from credit cards, checks or electronic fund transfers to settle online bets.

The chairman of the House Financial Services Committee Barney Frank has stood in opposition to the regulations, saying that it is rushed and its implications have not been fully considered.

As the Act stands, it will "burden the financial services industry at a time of economic crisis," he wrote in a letter to Treasury Secretary Henry Paulson and Federal Reserve Board of Governors Chairman Ben Bernanke, asking them to postpone issuing regulations. "I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations."

One of the other flaws Frank addresses is that the regulations do not define "unlawful Internet gambling." Frank writes, "leaving it to each financial institution to reconcile conflicting state and federal laws, court decisions and inconsistent Department of Justice interpretations when determining whether to process a transaction."

Favoring legislation that would require a study of Internet gambling and the impacts of regulating it, House Representative Shelley Berkley, who like Frank is a Democrat, said in a statement, "The clock is ticking on President Bush's prohibitionist crusade against Internet gaming and that is clearly why these flawed regulations are being forced on the financial services industry at the very last minute."

From its inception in 2006, Information Week reports, odds were stacked against this controversial legislation. "Its original supporters maintained the legislation would protect the morals of young Americans while opponents argued that it is too difficult to ban online gambling, because a ban is too difficult to enforce."

The Associated Press reports that US gamblers supply at least half of the $16 billion Internet gambling industry's revenue, which is largely hosted on overseas sites.

This is the latest government intervention in a long line of efforts to block US citizens from online gambling.

In September, Governor Steve Beshear launched a civil suit against 141 domains linked to gambling websites with the goal of seizing them to block Kentucky residents from accessing the sites.

Kentucky Judge Thomas Wingate, shortly after, denied the state's attempt to seize the domains until more evidence was made available; however, Judge Wingate will hear arguments pro and con before November 17, when he will make a possible landmark decision giving the state control of the gambling domain names.