In 2006 Congress passed the Unlawful Internet Gambling Enforcement Act. UIGEA made it illegal for online gambling companies to accept money for unlawful Internet gambling transactions and it called for regulations on the banking and payment processing industry. The U.S. Department of the Treasury and the Federal Reserve System board of governors released proposed regulations for UIGEA on October 1, 2007. Unfortunately the Federal Reserve and Treasury have used the excuse that they can’t finalize the rules because they are unclear on what is illegal online gambling and what is legal online gambling.
The AP is reporting the latest move on Capitol Hill:
The House Financial Services Committee voted Wednesday on legislation to require federal regulators to write a uniform definition of which types of gambling should and should not be allowed on the Internet, followed by new rules implementing the ban. The tie vote, 32-32, meant the legislation failed under committee rules.
Financial institutions have been upset with UIGEA from the beginning because they feel it’s a burden to monitor gambling transactions, but one Representative spelled out why such “burdens” are so necessary:
The committee’s top Republican, Rep. Spencer Bachus of Alabama, argued that gambling is the fastest-growing addiction in the United States and having it online makes it accessible to children. “The banks have decided that this is a financial burden,” Bachus said. “We have decided, on the other hand, that our children are worth protecting.”