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Government Professes Difficulties

Last week’s Congressional hearing to discuss the regulations that accompany the online casinos gambling ban brought out a lot of the key issues that surround the Unlawful Internet Gambling Enforcement Act (UIGEA). Witnesses from the financial services industries voiced concerns and complaints with the proposed regulations while even the governmental department that drafted the regulations admitted to facing significant problems and setbacks in the drafting process. The Federal Reserve and Treasury Department spoke at the hearing about difficulties classifying legal and illegal gambling activities.

The crux of the issue lies in the fact that there are no clear definitions in current U.S. and Congressional documents that clearly outline what constitutes online casinos gambling activity. Even the writers of the UIGEA struggled to define what internet gambling activities ought to be banned – they instead passed the buck to regulation drafters to solve the problem. Current Federal laws highlighting online casinos gambling are unclear and Congress has had problems delineating between forms of internet gambling, betting, poker, bingo, etc. Louise Roseman, the Director of Reserve Bank Operations commented on the dilemma that the Federal Reserve and Treasury Department faced. She notes that defining illegal online casinos gambling "is something we're really struggling with. The challenge we have is interpreting...federal laws that Congress itself isn't sure what they mean."

So the problems defining surrounding illegal online casinos gambling in the FRTD and the Department of Justice are reflected in the proposed regulations. There are just no clear instructions on how the financial services sector should differentiate between transactions. "It will be very difficult to shut off payment systems for use of Internet gambling transactions. The implementing statute will not be iron clad at all," commented Roseman.