The United States moved no closer to unequivocally defining “unlawful Internet gambling” as an
amended bill requiring regulators to draft such a defi nition was defeated by the narrowest of margins
Wednesday.
In its original form, HR 5767, the Payment Systems Protection Act,would have prevented the Treasury
Department and Federal Reserve Board from completing regulations for the Unlawful Internet Gambling
Enforcement Act, which requires financial institutions to block online gambling transactions.
However, Peter T. King, Republican of New York, proposed an NARROW VOTE QUASHES CLARITY ON UIGEA
amendment to the payment protection act that would have required the Fed and Treasury to draft a uniform definition for unlawful Internet gambling, a term whose meaning continues to elude regulators.
A 32-to-32 vote by members of the House Financial Services Committee, by whom the bill was under
review, saw Mr. King’s proposed amendment defeated.
The underlying bill, proposed by Ron Paul, Republican of Texas, and Barney Frank, the Massachusetts
Democrat who chairs the committee, was then defeated in a voice vote.
To the surprise of some observers, Mr. King’s strategy, that the bill be perceived as “a banking amendment,”
failed to rally the Republican vote. “I think it’s strange the Republicans would turn their backs on
the credit institutions and banks at a time when the Federal Reserve and Department of the Treasury
say the proposed rules for UIGEA are unworkable,” Michael Waxman, a spokesman for the Safe and Secure
Internet Gambling Initiative in Washington, D.C. In all, 29 Democrats and three
Republicans, including Mr. King, voted for the proposed amendment, while 28 Republicans and four
Democrats voted against, said Mr. Waxman, whose group lobbies Internet gambling policy.
IGN understands that Alabama’s Spencer Bachus, the ranking Republican member of the financial
services committee, was influential in garnering his party’s vote.
“After this long campaign by offshore gambling interests to block or repeal the law, what Congress needs
to do now is urge the Treasury Department and Federal Reserve to swiftly fi nalize their proposed rules
to implement UIGEA,” Mr. Bachus said in a prepared statement. “The regulations are long overdue, and
our young people need this protection now.”
Despite airing concern that the UIGEA’s language was diffi cult to discern--namely, its defi nition of
unlawful Internet gambling--the Treasury and Federal Reserve are now faced with the unenviable task
of finalizing the proposed rules. A spokesman for the Federal Reserve declined comment when
asked by IGN how it would proceed, though Jennifer Zuccarelli, a
spokeswoman for the Treasury, allowed: “We’re working to finalize the regulations as quickly as possible.”
Without the prospect of protection by Mr. Frank’s bill, United States banks--which, under the UIGEA,
are deputized to enforce its regulations-- remain in procedural limbo.
“We’ll continue to work with Congress and the regulators to ensure that regulations (for the UIGEA)
are not burdensome or unworkable,”
Peter E. Garuccio, a spokesman for the American BankersAssociation in Washington, told IGN by telephone.
The association, one of the more outspoken critics of the gambling enforcement act, lobbies on behalf of banks nationwide. Looking ahead, the next move by the United States Internet gambling lobby is far from certain. J. Daniel
Walsh, director of government affairs at Greenberg Traurig in Washington, did not immediately return
phone calls.
With the Congressional session set to wrap up early, and during an election year when politicians carefully hedge their political bets, it is unlikely that any new policy favorable to Internet gambling would be drafted or enacted.
“My colleague and I want to repeal the whole thing (the UIGEA),” Mr. Frank said during Wednesday’s
markup. “That may take one more presidential campaign, but we’re getting there.”
