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Bill to halt UIGEA: H.R. 5767 outcome meaningless to online gambling industry

Bill to halt UIGEA: H.R. 5767 outcome meaningless to online gambling industry Today was the hearing of H.R. 5767, the bill introduced by Rep. Barney Frank (D-MA) aiming at suspending all regulations stemming from the Unlawful Internet Gambling Enforcement Act (UIGEA). The brief summary of H.R. 5767 reads: To prohibit the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from proposing, prescribing, or implementing any regulation under subchapter IV of chapter 53 of title 31, United States Code, and for other purposes. Voting on the bill by the House Financial Services committee is scheduled for later today, but we say - it doesn't matter. I know what you think, but bear with me:

 First and foremost - the UIGEA is an empty law. The framework is there, but the most important parts - the regulations - have missed deadline after deadline, it's like a car without tires - technically a vehicle, but useless. The H.R. 5767 does not repeal the UIGEA, but instead puts the breaks on implementing any regulations associated with the so-called internet gambling law. Even if the Barney Frank's bill passed through all the channels, the UIGEA will still exist on the books. And the U.K.-licensed online gambling websites left because of the simple passage of UIGEA - it made it illegal for banks and financial institutions from conducting transactions with online gambling websites (except online horse racing betting). In other words - if H.R. 5767 is passed, it would still be illegal for the banks to process transactions to and from Internet gambling websites. Only this time around, the banks will not be required to do anything about it. Benefit to the online gambling industry - 0%, benefit to the banks - 100%. The H.R. 5767 is a bill to help out the banks and the banks alone, it has nothing to do with Internet gambling and poker players (We'll show you what does in a minute).

 You may think that if H.R. 5767 goes all the way through - payment methods would spring like mushrooms after a rain and all those bad checks you may have received from some online gambling websites would be a history. Wrong! One, it's still illegal for the banks to process payments to and from Internet gambling websites and two, those infamous bouncing checks have nothing to do with your bank refusing to cash them (although incidents of refusal have been know, even prior to UIGEA), but with the gambling site itself.

 No, my online gambling friends, H.R. 5767 is not what the Internet gambling industry needs. Hell, I don't even care what happens to UIGEA, repeal it, don't, it's all the same. For the little time the Unlawful Internet Gambling Enforcement Act has been "online", I cannot recall an instance in which someone was charged under it (Duh', no regulations). Even if the UIGEA was in full force, the banks are taking most of the heat, the gamblers have already been exempt from responsibility and any gambling website targeted, could expect to see an extra conspiracy charge. The usual charges filed against online gambling companies/representatives/employees/owners/payment processors currently are always based on money laundering. These charges have noting to do with UIGEA, but the lack of legalization and licensing of Internet gambling companies. Now we are cooking with gas! The industry needs to focus none on the H.R. 5767, but on these two bills: H.R. 2046 (Internet Gambling Regulation and Enforcement Act of 2007) by Rep. Barney Frank and the lesser-known H.R. 5523 (Internet Gambling Regulation and Tax Enforcement Act of 2008) Rep. James McDermott (D-WA).

 H.R. 2046 - Internet Gambling Regulation and Enforcement Act of 2007 is the bill the the online gambling industry world-wide should push for. Although a rough-draft, the H.R. 2046 amends federal law governing monetary transactions to establish an Internet Gambling Licensing Program administered and enforced by the Director of the Financial Crimes Enforcement Network. It prescribes requirements for the licensing of Internet betting or wagering, as well as provides that activities involving investment banking, payment and transaction processing, and financial transactions are shielded from liability if they are conducted in compliance with this Act and specified law (good ole Barney Frank). This important Barney Frank bill instructs the Director to report annually to Congress on the licensing and regulation of Internet gambling operators, however also authorizes states, Indian tribes and sporting leagues to prohibit internet gambling licenses. Not the perfect outcome for the Internet gambling industry, but a great framework for future amendments.

H.R. 5523 - the Internet Gambling Regulation and Tax Enforcement Act of 2008, was submitted on March 4th 2008 by Rep. James McDermott (D-WA), yes, the same state which made online gamblers felons overnight. The summary of H.R. 5523 reads "Amends the Internal Revenue Code to: (1) impose an Internet gambling license fee on Internet gambling operators; (2) require such operators to file informational returns identifying themselves and the individuals placing wagers with them; (3) require withholding of tax on annual Internet gambling winnings of more than $5,000; (4) impose a 30% tax on the Internet gambling winnings of nonresident aliens; and (5) impose the excise tax on wagers on any individual who places a wager with an unlicensed Internet gambling operator." Again, not the language most folks in the Internet gambling industry (including the gamblers) want to hear, but music to your ears, compared with UIGEA.

 H.R. 2046 and H.R. 5523 are the two bills everyone concerned with online gambling (in any way) should be watching. Anything else is just B.S.

 Andy Boyd

 Published on 06/25/2008

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