Two Years Later, UIGEA Has Rules (Update 1)

12 November 2008

Adds comment from OMB Watch

Two years after the UIGEA was enacted, the law's hotly debated regulations have finally been issued, but one Washington insider says there's still hope the rules may be overturned by the incoming administration.

The rules come during a period where the administration of President George W. Bush is seeking to put the finishing touches on its legislative agenda. The Washington Post reported Monday that some 130 rules could be finalized before Mr. Bush leaves office.

Matt Madia, a regulatory policy analyst with OMB Watch, a Washington, D.C., nonprofit that monitors the Office of Management Budget, told IGamingNews that the uptick in midnight rulemaking is typical in the waning days of an administration.

"We are seeing a lot of activity, but most of the rules haven't been finalized yet," he said.

Last May, Joshua B. Bolten, the White House chief of staff, sent a memo to agencies -- including the Treasury Department -- stating all regulations, "except in extraordinary circumstances," were to be issued no later than Nov. 1.

" 'Extraordinary circumstances' means any politically loaded rule where an Obama administration would likely take a different posture," J. Daniel Walsh, an I-gaming lobbyist with Greenberg Traurig in Washington, told IGN.

"There is a lot of talk downtown about the new Congress, once Obama is sworn in, doing a sweeping resolution to overturn all of the midnight rules at once," he said. "A lot of people think this is the end of the game, but I don't think it is."

An attorney, who requested anonymity, informed IGN that the 111th Congress, with the Democratic majority, could leverage the Congressional Review Act of 1996 to overturn any rules that were issued by the Bush administration after mid May.

According to The Politico, Congress last used the review act in 2001 to reverse a rule, issued by the Clinton administration, which established new requirements for ergonomic work spaces.

In the coming days, IGN will provide an analysis of the 121-page rule with a further update on political efforts to overturn it.

At the heart of the rule remains a prohibition on banks and financial institutions from processing payments for unlawful Internet gambling.

Click here to read the regulations for the UIGEA.

Click here to read Mr. Bolten's memo to the agencies.

The IGN staff continually troll the wires, foreign papers, corporate news alert services and other dark, dusty corners of the Web to bring you the very latest industry news.