US authorities don’t know how to apply internet gambling laws

Federal Reserve and Treasury officials in Washington have admitted they are finding it hard to implement rules to underpin the Unlawful Internet Gambling Enforcement Act 2006 (UIGEA) that effectively banned online gambling in the U.S.

The bill made it illegal for banks to process transactions from online gaming companies and led to catastrophic results for companies such as PartyGaming and Sportingbet and their departure from the U.S market.

Now the Federal Reserve and Treasury Department are responsible for drawing up the laws that will implement the act.

"That is something we're really struggling with," said Louise Roseman, director of reserve bank operations and payment systems at the Federal Reserve.

Roseman revealed that even Congress, who passed the bill at the end of 2006, were unsure of what the laws mean. For example, online horseracing betting is still allowed by the Interstate Horseracing Act of 1978. Roseman has called for a clear line between what is a legal transaction and what is an illegal transaction.

"Clarity on this point would permit them to design policies and procedures that they could be assured would meet the rule's requirements," Roseman said.

"Still others, including some gambling businesses and many consumers, asked that the rule clarify that certain types of gambling, such as pari-mutuel betting or poker, are lawful."

Roseman also revealed that they are currently working towards “reasonably practical examples”, with a final rule expected to be issued before the end of 2008.

Editor, - 2008-04-03 10:52:59

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