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September 12, 2008 (InfoPowa News) — Online gambling in the United States is in the headlines again as the week closes, with a new political initiative by House Committee on Financial Services Chairman Barney Frank (Democrat of Massachusetts). His Payments System Protection Act of 2008, just introduced, seeks to push federal authorities on a more precise definition of exactly what constitutes “illegal” Internet gambling in terms of the Unlawful Internet Gambling Enforcement Act (UIGEA) and supporting regulations — a long-standing bone of contention for the congressman.
The Bill asks Congress to direct the Department of the Treasury and Federal Reserve System, in consultation with the U.S. Attorney General, to create “a formal process” to define what types of online gambling are unlawful in order to assist the U.S. financial services industry to comply with the burden of policing the UIGEA which Congress thrust upon it back in 2006.
The controversial regulations thus far drafted by federal officials have been widely criticised for a lack of precision, and placing too heavy a burden on the financial services industry charged with enforcing it. (It’s also been a hot topic of debate here at CAP.)
Frank wants federal regulators to appoint a special Administrative Law Judge to define unlawful Internet gambling activities and conduct an economic impact study on the likely high costs to the industry for ensuring compliance.
The Safe and Secure Internet Gambling Initiative political pressure group that supports regulation of the U.S. online gambling market is in favor of the measure.
“Chairman Frank is doing the right thing by saying it is unfair to burden U.S. financial service companies with the job of Internet gambling police at a time when their undivided attention ought to be on the economy,” said Jeffrey Sandman, spokesperson for the group.
“The reality is that UIGEA is dangerous to the payments system and unlikely to stop anyone from using the Internet to play poker, bet on horses, or engage in other types of wagering.”
Frank’s latest proposal started life as HR5767, introduced mid-year by Texas Republican Representative Ron Paul and himself on concerns about the ambiguity of the UIGEA regulations. It sought to have drafting suspended until the lack of precision and economic impact of the UIGEA had been properly addressed. In a hotly contested debate, the proposal was defeated in the House Committee on Financial Services.
At the time, Frank (who chairs that committee) told his colleagues that Congress is putting the U.S. financial services industry at risk by not clarifying the regulations to enforce UIGEA and defining unlawful Internet gambling activities.
“Hijacking the financial payment system at a time when it is under major stress and giving them the job of carrying out an unclear mandate doesn’t make sense,” he said. He was backed by spokesmen for the U.S. financial services industry, including the Chamber of Commerce, the Financial Services Roundtable, Credit Union National Association, and National Association of Federal Credit Unions, all of whom pledged their support for the original version of the Payments System Protection Act and the King amendment in letters to Rep. Frank and members of the Financial Services Committee.
“I wish to be clear that we do not support the notion that financial services companies should be ‘deputized’ to police gambling activity in any form or function,” wrote Steve Barlett, president and CEO of the Financial Services Roundtable on June 23, 2008. “While we would support the passage of H.R. 5767 as introduced, I agree that the King Amendment makes essential improvements to a deeply flawed law and therefore support its inclusion.”
Representatives Frank and Paul additionally communicated with Treasury Secretary Henry Paulson in a widely distributed letter that claimed the UIGEA regulations, and indeed the underlying legislation, failed to define the term ‘unlawful internet gambling,’ leaving it to each financial institution to reconcile confusing and often conflicting state and federal laws, court decisions, and inconsistent Department of Justice determinations when deciding whether to process a transaction.
Concerns about the impact of UIGEA were also raised by the Americans for Tax Reform and Competitive Enterprise Institute in a letter to members of the Committee on Financial Services dated June 23, 2008, which said that “if implemented as proposed in current regulations, UIGEA would have a number of serious, negative consequences for the nation’s economy.”
In April this year, more than 200 comments were submitted by interested parties to a congressional hearing titled “Proposed UIGEA Regulations: Burden without Benefit?” At the hearing, representatives of the Department of the Treasury and Federal Reserve System acknowledged the challenges U.S. financial institutions will face in attempting to comply with UIGEA.
Congressman Frank has more legislation pending, aimed at regulating and licensing online gambling in the USA. His Internet Gambling Regulation and Enforcement Act of 2007 (H.R. 2046) includes a number of built-in consumer protections, including safeguards against compulsive and underage gambling, money laundering, fraud, and identity theft. The bill, which has yet to be introduced, has thus far garnered bipartisan support from more than 40 congressional representatives.
Following up, this news is all over the Internet today. Here are some more useful takes on the story:
OnlineCasinoAdvisory.com: “ … Frank has once again introduced a bill that would simultaneously grant citizens greater liberty while also protecting children and guarding against money laundering.” http://www.onlinecasinoadvisory.com/casino-news/online/frank-tries-again-regulating-online-casinos-1957.htm
PokerListings.com: http://www.pokerlistings.com/frank-introduces-new-version-of-hr-5767-30481
Gambling 911.com: http://www.gambling911.com/gambling-news/barney-frank-introduces-new-online-gambling-bill-091208.html
Poker News Daily: http://www.pokernewsdaily.com/frank-introduces-new-internet-gambling-legislation-367/
And here’s a nice profile of Rep. Frank from Scripps News that isn’t specifically about UIGEA, but a good read nonetheless: http://www.scrippsnews.com/node/36269
@NathanCAP 176063 wrote:
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And here’s a nice profile of Rep. Frank from Scripps News that isn’t specifically about UIGEA, but a good read nonetheless: http://www.scrippsnews.com/node/36269
ok this STAR PARKER, is real piece of work.
not to get off the real topic but conseratives need to lighten up on the values thing. I personally know both liberals and conseratives with and without values. The truth is if right wingers were really for pro life they’d not kill things just for the sport of it.Update: Quick Markup for Barney’s Bill
September 16 date for Payment System Protection Act
September 15, 2008 (InfoPowa News) — Congressman Barney Frank‘s latest legislative attempt to bring some precision and sense to the controversial Unlawful Internet Gambling and Enforcement Act of 2006 and its ambiguous regulations has been given a fast ride to a markup session by the House Committee on Financial Services, which Frank chairs.
His HR6870 Payment System Protection Act, which seeks to pin the federal authorities down on key definitions such as “illegal Internet gambling,” is scheduled for markup on Tuesday September 16, the committee announced late Friday.
The following bills are on the schedule:
H.R. 6694, FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008;
H.R. 6870, Payment System Protection Act;
H.R. 3019, Expand and Preserve Home Ownership Through Counseling Act;
H.R. 6642, National Consumer Cooperative Bank Act Amendments of 2008; and
H.R. 6871, Expedited Funds Availability Dollar Limits Adjustment Act of 2008.The proceedings can be viewed here: http://www.house.gov/htbin/leave_site?ln_url=http://boss.streamos.com/wmedia-live/financialserv/16489/300_financialserv-
Update on markup in today’s hearings, theres actually 2 articles from Online Casino Advisory on the topic, haven’t seen it elsewhere, sorry if it’s already posted…
Bachus said that children had to be protected from Internet casinos, as he claimed the earlier in age one is exposed to gambling, the greater the chance that compulsive gambling develops, and the stronger the compulsion.
This is in direct contrast to today’s article in the scientific journal “Psychology and Aging’, which quotes a study by Rutgers University’s Center for Gambling Studies that found elderly adults exposed to gaming for the first time are four to five times more likely to suffer problem gambling than those exposed at an early age.
William Lacy Clay, a Democrat from Missouri, said Congress should avoid passing laws like the UIGEA which are largely unenforceable. Noting that Spencer Bachus claimed sports leagues were still united against the new bill, even though it still banned sports online wagering, Clay pointed to the hypocrisy involved, as sports gambling is readily available at Vegas sportsbooks….
These valid arguments were followed by a near unanimous vote to allow the bill to pass markup and proceed to full committee vote later today.
http://www.onlinecasinoadvisory.com/casino-news/online/frank-gambling-bill-passes-markup-1970.htmVote passed
In the House Financial Services Committee on Tuesday, HR 6870, the second version of Barney Frank’s Payments System Protection Act, was passed by a 30-19 vote. After initially being discussed and voted on orally, Republican Congressman Spencer Bachus asked for a roll call vote. The Committee reconvened for the formal vote at 5:00pm ET, eventually passing the legislation comfortably. The measure may now move on to vote on the floor of the House of Representatives.
http://www.pokernewsdaily.com/committee-approves-barney-frank%E2%80%99s-hr-6870-382/
Awesome! Thanks for the updates, Luigi! The InfoPowa server where CAP normally gets its news is apparently down today, so we haven’t seen these updates. I’ll get something posted on CAP News right away.
I’ve posted the story to the CAP News page. Thanks again for the head’s up, Luigi.
Report: Barney Frank’s Bill Passes Committee. PokerListings.com Reports the passage of HR 6870 by the Financial Services Committee, on a 30-19 vote
September 16, 2008 — The U.S. House of Representatives’ Financial Services Committee has passed Barney Frank‘s H.R. 6870 bill, PokerListings.com has reported today.
The bill is a direct challenge to UIGEA, and seeks to ensure that “implementation of the proposed Unlawful Internet Gambling Enforcement Act regulations doesn’t cause harm to the banking and financial industry,” wrote Sarah Polson on PokerListings.com earlier today.
While the bill won’t exactly eliminate the UIGEA, it’s a worthy effort to slow it down and reduce its scope and effect. And while its slowed down, Frank and his allies plan to create an alternative that seeks to actually regulate online gambling instead of criminalizing it.
“HR6870 will try to pick up where the original ‘Payment Systems Protection Act’ left off, a similar Frank bill which failed due to a deadlocked vote in committee,” states PokerRoad.com.
This new bill has already had much more success than the previous bill. Rep. Frank (Democrat, Massachusetts) seems dedicated to this cause and is definitely sticking with this issue, not having let the defeat of the previous bill earlier this summer dissuade his efforts.
“That bill was defeated in committee by a tie vote,” writes Polson in the PokerListings article, “and now Frank has reintroduced it with a more targeted approach. Rather than stopping the implementation of the UIGEA, he is using the Payments System Protection Act to try to define illegal online gambling and narrow the focus of the UIGEA.“One section of the bill limits the Secretary of the Treasury and the Federal Reserve to applying the UIGEA regulations only to online wagering that is already specifically prohibited — namely betting on sporting events.
“Another section asks that the two agencies consult the attorney general to develop and implement UIGEA regulations that clearly define ‘unlawful Internet gambling’ and only do so after conducting a full economic impact study of the proposed regulations.”
Still, the bill has a long way to go. It must pass through the entire House of Representatives, and then through the Senate, ultimately landing on the president’s desk (if it makes it that far). And, unfortunately, most bills suffer serious revision during this process.
It was encouraging, however, to see the level of support received by the bill during the day. According to Online Casino Advisory:
“Representative Peter King, a New York Republican, asserted that the bill was wholly a representation of what he thought was in the best interests of the financial community as well as the average citizen.
“William Lacy Clay, a Democrat from Missouri, said Congress should avoid passing laws like the UIGEA which are largely unenforceable. Noting that Spencer Bachus claimed sports leagues were still united against the new bill, even though it still banned sports online wagering, Clay pointed to the hypocrisy involved, as sports gambling is readily available at Vegas sportsbooks.
“Clay stated he didn’t see a reason something legal on land should be illegal on the Internet.
“Barney Frank contradicted accusers who said the bill meant government encouragement to gamble online. He pointed out that there should be more than just two areas of behavior: those illegal, and those encouraged by government.
“He noted the right of free people to choose their own course, rather than have government dictate it.”
Let’s all wish Congressman Frank the very best of luck for his hard work. Keep up the good work, we need someone who understands the issues.
Further analysis from OnlineCasinoReports.com: “Poker Players Bank on Frank”:
Determination wins out as Payments System Protection Act wins approval
September 17, 2008 (OnlineCasinoReports.com) — OnlineCasinoReports.com’s Brett C offers the following analysis of Barney Frank’s recent legislative win:
Change is coming
Chairman Barney Frank finally closed the deal in the House Financial Services Committee on Tuesday. Online poker players will be thrilled that HR 6870 – the Payments System Protection Act – was approved by a 30-19 vote. This effectively means Congress is going to be discussing this in 2009.Frank has long championed regulating the industry, as evidenced by his attempts at halting the regulations of the UIGEA. Back then, Frank and fellow Congressman Ron Paul (R-TX) hit a brick wall, but not this time around.
The details
The PSPA (HR 6870) expressly calls for the suspension of the UIGEA except under certain conditions, mainly pertaining to prohibited betting. Such activities include pro and amateur sports betting. The bill would prevent banks from permitting betting on pro sports leagues.Further details relate to the formulation of a list detailing what is against the law under the UIGEA.
Opponents stand firm
The usual suspects in congressman Spencer Bachus came out against the bill. While Bachus appreciated the clarification on halting financial institutions from supporting sports betting, he is against allowing any online gambling in the country. For his part, Bachus has beseeched the Treasury and Federal Reserve to fully implement the UIGEA regulations.Additionally sports leagues have voiced disapproval with the bill, despite there being legal sports books in Las Vegas.
Barney Frank admits much work has yet to be done in clarifying the legalities of various online gambling activities. He was quoted as saying: “How people spend their leisure time should not be made illegal or encouraged in a free society. If you’re going to [impose restrictions using the UIGEA], you’re hijacking the banking system. If this bill is passed, I would still like to repeal the law. Under this bill, at least the banks will know what is and isn’t illegal.”
Online poker players raise their glasses
Barney Frank introduced an amended bill which included express descriptions of both legal and illegal activities under the UIGEA for submission to financial institutions. An oral vote secured its passing and even Congressman Bachus’ insistence on a roll call vote failed to halt its passing.This truly was a day that online poker players raised their glasses in celebration!
