Amended U.S. Bill Seeks Express Definition of 'Unlawful Internet Gambling'

23 June 2008

If enacted, new language for the Payment Systems Protection Act, a United States bill scheduled to be amended this week by the House Financial Services Committee, would force regulators back to the drawing board to determine the express definition of unlawful Internet gambling.

In its current form, the payment protection act would prohibit the Treasury Department and Federal Reserve Board from finalizing the proposed regulations for the Unlawful Internet Gambling Enforcement Act, which requires financial institutions to block online gambling transactions.

According to a source in Washington, D.C., who is closely acquainted with the payment protection act, the new language would prohibit regulators from finalizing the gambling enforcement act rules until a separate, formal rulemaking process was undertaken to determine what is intended by "unlawful Internet gambling."

The gambling enforcement act, which took effect in October 2006, was scrutinized at a financial services subcommittee hearing on April 2, 2008, where Treasury and Federal Reserve officials argued the act's intended objective was difficult to discern.

"I think it is very difficult without having more of a bright line about what is intended to be unlawful Internet gambling," Louise L. Roseman, director of the Fed's payment systems and reserve bank operations division, said during the hearing.

Representative Barney Frank, the Massachusetts Democrat who leads the financial services committee, and Representative Ron Paul, the libertarian Texas Republican, jointly introduced HR 5767, the payment protection act, on April 11, 2008.

The bill is scheduled to be amended Tuesday.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.