Letter warns against enforcing UIGEA

In 2006 the Unites States passed the Unlawful Internet Gambling Enforcement Act (UIGEA) which was supposed to put an end to online gambling. It has been a chaotic two years for the online gambling industry which caused many public betting companies to close up shop in the US, however online gambling is thriving and received some good news for the industry this week when a group of the House Financial Services Committee which includes both Democrats and Republicans, led by Democrat from Massachusetts Chairman Barney Frank and Republican Ron Paul of Texas sent a strong letter to the Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke with some very strong wording concerning enforcing the Unlawful Internet Gambling Enforcement Act .

According to TheHill.com, the letter states that the Committee has warned U.S. treasury and Federal Reserve officials to stop wasting more time and resources on implementing the online gambling ban and for them to focus on much more important issues including the home mortgage crisis. The wording is very strong, specific and will be interpreted as a big win for the online gambling community. The online website, TheHill.com quoted this from the letter, "We believe it would be imprudent for you to devote additional agency resources to this Sisyphean task, especially as we intend to vigorously pursue legislation to prevent the implementation of these regulations."

On April 2nd, 2008 the Financial Services Committee held a hearing on Internet Gambling and the implementation of the UIGEA. Wayne Abernathy, the executive director of financial institution policy and regulatory affairs for the American Bankers Association stated, "Bank representatives warned that the proposed rules are so unclear and so sweeping that the UIGEA has a chance to cause “an erosion of the performance of the financial system.”

The Treasury Federal Reserve System and Treasury Department also testified that the UIGEA is vague and confusing and the law does not state specifically what is illegal gambling. Louise Roseman, the director of the division of reserve bank operations and payment systems said, “The most prominent concern is the lack of clarity of what forms of gambling are unlawful.”

There were over 200 comments were submitted to the Dept Of Treasury concerning possible problems with the UIGEA. Some who spoke up against the UIGEA and enforcing it include reps from Wells Fargo, Credit Union National Association and Financial Services Roundtable

Rep. Barney Frank has been working hard towards over turning the flawed law for almost two years. He introduced the Internet Gambling, Regulation, and Enforcement Act, H.R. 2046 and has 48 co-sponsors.