Banks Start Gambling Oversight
Must now block customer transactions for illegal online betting
6/2/10 - Boston Herald - View Source
By Jay Fitzgerald
Massachusetts banks think they’re holding a losing hand when it comes to new online gambling rules that went into effect yesterday.
After years of debate and controversy, banks across the nation yesterday reluctantly began to comply with new regulations calling on institutions to block credit- and debit-card transactions involving illegal online gambling.
Pushed by opponents of gambling, the rules were opposed by a banking industry that thought they were too tough to enforce and put too much responsibility on banks to crack down on Internet betting.
“We’ve become the de facto cops on the beat,” said Jon Skarin, director of public policy at the Massachusetts Bankers Association. “They’ve been working on this for years. We don’t like it. Why are we the police officers for this type of activity?”
Despite reservations, Skarin said banks will be ready to comply with the law, using credit-card codes sent to them from card issuers. If an unauthorized card code pops up, the transactions will be blocked, he said.
U.S. Rep. Barney Frank (D-Newton) said yesterday he’s sympathetic to the banking industry’s concerns about the new rules, formulated after years of delays and infighting about how to implement the congressional mandate.
Frank, a supporter of making gambling legal, said the rules are an “intrusive” burden on smaller community banks, many of which are not confident about their ability to catch all illegal gambling transactions.
Skarin said the issue is made more complicated by the proliferation of online gambling across international borders.