Two conservative Republican senators have sent a letter to the chairmen of the U.S. Treasury Department of Federal Reserve System outlining concerns about the Unlawful Internet Gambling Enforcement Act (UIGEA).
Senators John E. Sununu of New Hampshire and Pete Domenici of New Mexico called for the two government agencies who are responsible for enforcing the UIGEA to amend its proposed enforcement rules to clarify just what transactions banks must block.
“The extensive public comments received on this issue highlight the likelihood that risk-averse financial institutions will simply choose to block every transaction that may be interpreted [as] or could resemble gambling, whether legal or not. Knowing that this is not your intention, we write to urge that any final rules contain a list of restricted transactions and instances that are covered by the law and the corresponding rules,” the letter reads, which both Senators co-signed.
In October, the U.S. Treasury Department and the Department of Federal Reserve Systems published a set of proposed rules that will be used to enforce the UIGEA. The public was able to view these rules and comment on them until December. The two Federal departments are now reviewing the comments and will possibly make revisions to the rules before enacting them. There is no deadline for this to take place.
The entire letter follows:
Dear Secretary Paulson and Chairman Bernanke,
The effectiveness of any law is reliant on sound implementation. Federal regulations are intended to provide clarity and guidance for those subjected to their reach. The value of such regulations is to prevent non-compliance while minimizing wasted effort, time, and cost by those being regulated. Clear rules also promote interstate commerce by facilitating uniform enforcement.
In this spirit, your agencies have an opportunity to provide additional guidance in the implementation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). While the October Notice of Proposed Rulemaking contains certain guidance for the regulated community, it leaves sufficient ambiguity as to what sort of transactions are to be blocked. In failing to provide more detail, the proposed rules would inordinately burden every bank, credit union, credit card company, money transmitting business and payment system in the country, leading to non-uniform compliance and confusion. This issue is particularly important, as most federal and state gambling laws predate the Internet, and are less than specific as to their application to particular practices or circumstances.
The extensive public comments received on this issue highlight the likelihood that risk-averse financial institutions will simply choose to block every transaction that may be interpreted [as] or could resemble gambling, whether legal or not. Knowing that this is not your intention, we write to urge that any final rules contain a list of restricted transactions and instances that are covered by the law and the corresponding rules.
As an alternative, we suggest you consider separating the rules into those forms of activities for which there is settled federal law (i.e., defined by the Professional and Amateur Sports Protection Act (PASPA)) and those that are not. This would allow immediate implementation for known activities, while providing greater time to determine what other transactions are to be captured.
We thank you in advance for your consideration.
Sincerely,
Sen. John E. Sununu [R-NH] Sen. Pete Domenici [R-NM]
