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Banks on Online Casinos Regulations

The U.S. financial services sector did not have positive things to say about the U.S. online gambling regulations designed to accompany the Unlawful Internet Gambling Enforcement Act (UIGEA). Basically, the Federal Reserve and Treasury Department along with the U.S. Department of Justice passed the burden of the UIGEA off to the banks and financial institutions since they were having such a hard time drafting the regulations. Rather than come to a consensus on what constitutes illegal online casinos gambling, the regulations leave it to the banks to delineate between what is and is not legal gambling. Well that just doesn’t fly with American Bankers Association which sent a representative to speak at this week’s Congressional hearing.

The ABA spokesperson, Wayne Abernathy, spoke on behalf of all of the U.S. banks and financial services sectors when noting that “The UIGEA and the Proposed Rule do not provide a rational path towards halting unlawful Internet gambling." The U.S. financial sector is already taxed right now because of problems in the U.S. housing market and increased financial pressures on Americans in terms of rising fuel and food costs. Then add to that the burdens that the regulations would put on the banks, and the Abernathy was solidly against the UGIEA regulations in their current form.

In essence, the online casinos gambling regulations are poorly defined and pass the buck off to the financial institutions to make decisions that are much better suited for law enforcement agencies and the U.S. government. Abernathy continues noting that the regulations "impose significant compliance burdens on financial institutions by increasing their role in policing illegal activities, determining whether a transaction is illegal, or by imposing ambiguous compliance requirements that could be subject to wide variations in interpretation by regulators and law enforcement agencies. We believe these functions are more appropriate for law enforcement agencies."