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Poker Petition

HEADLINE: UIGEA Regulations Won’t Change Online Poker Industry

Body:
Coming out of National Poker Week, an effort orchestrated by the Poker Players Alliance (PPA) to legalize and regulate the online game in the United States, many wondered what the future of the industry would be once the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) are fully enforced in December.

As it currently stands, the financial services industry has until December 1st to comply with the 2006 law. Despite the presence of 32 co-sponsors of HR 2266, which delays mandatory compliance with the UIGEA by one year, the bill has yet to see time in the House Financial Services Committee. In addition, Congress will be on recess during the month of August, returning after the Labor Day holiday in the United States.

In an exclusive interview with Poker News Daily during the recent PPA Fly-In, poker lobbyist Mickey Leibner noted, “We hope that HR 2266, which is the bill to delay the implementation of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year – We’re hopeful that we can get something done on that as soon as we get back from the August recess. That’s the plan.” In the interim, concerned poker players are encouraged to call, e-mail, and write their Congressmen urging support of HR 2266 and HR 2267, the latter of which establishes a full licensing and regulatory framework for the internet gambling industry in the United States. Congressman Barney Frank (D-MA) introduced both measures in early May.

In order to gauge the potential effectiveness of the regulations once they are in full effect, Poker News Daily sat down with noted gambling and the law expert Nelson Rose.

Poker News Daily: What do you foresee as the future of the online poker industry in the United States come December?

Rose: I think there’s a good chance that HR 2266 will pass. Nobody likes the regulations of the UIGEA, but it’s of such little interest to members of Congress right now.

PND: You had mentioned to us in a previous interview that you doubted how effective the regulations of the UIGEA would ultimately be. Can you comment on that?

Rose: I don’t think they’re going to have any effect at all. The whole focus has changed. Instead of looking at individual transactions, financial institutions are now told not to. Basically, the whole program is due diligence on new accounts. If you’re crazy enough to set up a bank account with an American bank, they’ll ask if you’re involved in illegal internet gambling. Banks are specifically told not to look at individual transactions, so it doesn’t really do much except impose an extra level of regulation and cost onto the banks. The payment processors have already figured out ways around it.

PND: Is over-blocking by companies like Visa and MasterCard a function of compliance with the UIGEA? For example, legal online lottery transactions in North Dakota and New Hampshire have been blocked.

Rose: The credit card companies stopped letting their cards be used a few years ago. It was partly because of a fear of charge backs and partly because they were afraid they were doing something illegal. The U.S. Department of Justice ran a very successful campaign of intimidation and it worked. In fact, I work with racetracks and state lotteries and they’re having a horrible time doing transactions that everyone agrees are legal.

The UIGEA is a piece of garbage, but the regulators did the best they could do with it. It’s an un-funded mandate. It’s a requirement that banks spend money for nothing and that’s not what the government should be doing right now, partly because we’re in a financial crisis. It’s also personal intrusion. The regulations would have been killed last summer, but the Republicans decided to make it into a political issue.

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