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UIGEA Regulations Criticized by Banking Lobbyists

The US Treasury is probably used to its Unlawful Internet Gambling Enforcement Act regulations being criticized by the online casino industry. However, not only the online casino industry believes that the regulations have no place. Banking lobbyists expressed their concern and disapproval of the regulation drafts of the Treasury. The Financial Services Round Table, a specialist who represents top banks and financial services companies, said that the regulations present major compliance obstacles and that further clarification is needed.

The administration has released a batch of regulations that are suppose to emphasized who the Unlawful Internet Gambling Enforcement Act is supposed to be enforced and executed. However, banks and other financial companies, the ones who need to enforce the act, aren’t sure what they are supposed to be doing. The Act itself isn’t that clear on the notion of online gambling and some areas are – what can be called – on the borderline. It’s not clear if a certain action is regarded as online casino gambling and as such should not be processed into the system. Online casino horse racing is one of those topics. Betting over horse racing within the US is illegal, but online sites that offer such gambling services where never prosecuted. The lobby is asking the administration to make things clearer.

However, the Unlawful Internet Gambling Enforcement Act isn’t that clear intentionally. Making the act clearer will not be easy for the administration. The vagueness was partly what got the act its support. Additionally, the lobby believes that “the statute and the proposed rule expand the role of financial institutions to police laws that are more appropriate for law enforcement agencies.” The lobby is correct. This is a unique request by the administration. Instead of having police and other law enforcement agencies enforce the law, private firms are asked to be liable. It’s not even clear if banks and other financial firms are capable of enforcing the law and who is responsible for financing these added tasks.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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