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US Defers Bank Rules on Internet Gambling11/27/09 - Wall Street Journal - View Source By David Lawder WASHINGTON -- The Treasury Department and the Federal Reserve are giving U.S. financial institutions an additional six months to comply with regulations designed to ban Internet gambling. The agencies said Friday that the new rules, which were to take effect Dec. 1, would be delayed until June 1 of next year. The rules seek to curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. The financial industry complained that the new rules would be difficult to enforce because they didn't offer a clear definition of what constitutes Internet gambling. They had sought a 12-month delay in implementing provisions of the Unlawful Internet Gambling Enforcement Act that Congress passed in 2006. The Bush administration issued regulations to enforce the law in November 2008 and had set Dec. 1, 2009, as the date financial institutions would have to begin complying. In a joint notice Friday, the Treasury and the Fed said several members of Congress had sought a delay, arguing that there was considerable support for new legislation to clarify current laws. According to the joint release, Senate Majority Leader Harry Reid (D., Nev.) and House Financial Services Chairman Barney Frank (D., Mass.), among other lawmakers, sent letters expressing concern that the law doesn't contain a clear definition of "unlawful Internet gambling." Mr. Frank supports legislation that would roll back the 2006 law. He proposes allowing the Treasury Department to license and regulate online gambling companies that service American customers. Sen. Jon Kyl (R., Ariz.) and Rep. Spencer Bachus (R., Ala.), however, had opposed delaying compliance, for reasons related to "the speculative nature of the problems raised by petitioners, the associations and other interest groups," the agencies' release said. The two agencies said groups seeking a delay had provided sufficient reasons to justify a limited six-month delay. Financial organizations including the American Bankers Association had sent the agencies letters supporting a petition filed by gambling industry associations seeking a delay. In September, a federal appellate court in Philadelphia upheld the 2006 law, rejecting a challenge from an association of offshore bookies that the federal prohibition was too vague and violated privacy rights. U.S. bettors have been estimated to supply at least half the revenue of the $16 billion Internet gambling industry, which is largely hosted overseas. |
 
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