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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