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“We certainly appreciate the interest,” says banking association
The Washington DC publication The Hill reports that the banking industry is cheering the fresh assault on the UIGEA (see previous InfoPowa report) mounted by House Financial Services committee chairman Barney Frank (D-Mass.) and Congressman and presidential aspirant Ron Paul (R-Texas).
Congressman Frank has teamed up with the libertarian-minded Paul, who crusaded against big government during his recent White House bid, on legislation to block the contentious 2006 legislation by forbidding federal officials from writing rules to implement it. Those officials have already admitted that the regulations supporting the UIGEA are proving difficult to draft, with strong opposition from the financial industry that is required to act as policeman for the federal government.
“I don’t know what can be done or will be done legislatively, but we certainly appreciate the interest,” said the top lobbyist for the American Bankers Association , Floyd Stoner, of the Frank-Paul legislation.
Frank’s new legislation attacks the practical hurdles regarding the implementation of the Unlawful Internet Gambling Enforcement Act, rather than its legitimacy.
“While I do disagree with the underlying objective of the act, I believe that even those who agree with it ought to be concerned about the regulations’ impact,” Frank said in a statement. He argued that the regulations proposed by the Federal Reserve and the Treasury were “…impossible to implement without placing a significant burden on the payments system and financial institutions.”
Supporters of banning online gambling have been quick to respond to the latest attack on the UIGEA, vowing to beat back the new effort to undo the law.
“Our office will vigorously oppose any efforts to repeal or water down any parts of the [federal law],” said Ryan Patmintra, a spokesman for Senate Minority Whip Jon Kyl (R-Ariz.), who was a chief sponsor of legislation to ban online gambling in the Senate.
“It’s another attempt to take apart a bill that was passed overwhelmingly by the House,” said Tom McClusky, the vice president for government affairs at the Family Research Council , which had pushed hard for the federal crackdown. He noted that 48 state attorneys general had pushed for the federal law to enforce their state bans.
The National Football League and other professional and amateur sports organisations are also gearing up to fight Frank’s new law, threatening to “vigorously oppose” the legislation, said Martin Gold, a lawyer at Covington & Burling and a longtime lobbyist for the NFL.
Federal law is murky on what constitutes illegal gambling online. Congress stopped short of defining it clearly in the 2006 law, directing the federal government instead to enforce state laws restricting such activities. It also excluded online horserace betting from the crackdown.
Now, writing rules to implement the law is bedeviling regulators. “The challenge we have is interpreting … federal laws that Congress itself isn’t sure what they mean,” Louise Roseman, a Federal official, testified on April 2 before Frank’s committee.
The banking industry has flooded the Treasury and the Fed with complaints about their proposed rules, arguing that it is too difficult for banks to sort out payments for legal wagers — such as on horse races — and those that are illegal.
“The banking system is just not set up to sort out whether one payment is a legal payment and one payment is not,” said the director of congressional affairs for the Independent Community Bankers of America , Steve Verdier. “We think the [Frank-Paul] bill would give everyone the chance to take a breath.”
Charles Rothfeld, a lawyer at Mayer Brown who has argued several cases before the U.S. Supreme Court, said that the Frank-Paul legislation is not likely to pose any constitutional problems. “Congress gets to say the way in which its legislation is implemented. If it wants to issue legislation to preclude the promulgation of regulation, it can do that,” he argued.
The Hill reports that aside from the banking industry, the Frank-Paul bill also has support from gambling aficionados and firms.
However, the American Gaming Association , which says its members do not include online gambling operators, has not taken a stance on the bill and remains “neutral” on the 2006 law. However, the association supports a bill sponsored by Representative Shelley Berkley (D-Nev.) to commission a one-year study of online gambling by a third party.
