American Bankers' Association Critiques Online Casino Ban Rules
The website for the American Bankers' Association detailed the group's problems with the UIGEA, and the corrections or lack thereof the Bush administration made when implementing the midnight rule. Most telling is that, despite pleas from Congressmen as well as Internet gambling sites and the financial industry, no definition was ever determined for "unlawful Internet gambling."
Banks had asked for this clarification, plus a blacklist of online gambling sites that were to be forbidden the use of payment transaction services. But the government did not comply, leaving banks in the precarious position of determining legality and exclusion.
The good news came in several forms. Banks will not be required to meet the new requirements until December 1st, 2009, by which time many expect the law to have changed drastically. Secondly, the brunt of responsibility for banks falls at the opening of accounts.
New commercial accounts are to be investigated to ascertain that they do not represent illegal online gambling. Legal Internet gambling sites will have to prove to banks they are within the law, something that may be impossible to do, given the rat's nest of conflicting state and federal law.
For instance, horse racing, which is specifically exempted in the UIGEA, still is considered illegal by the Department of Justice when bets are taken on the Internet, under its misreading of the Wire Act.
Banks are not held accountable by payments made by gamblers; these transactions must be monitored by card and credit companies. Banks are only responsible for existing accounts when they receive "actual knowledge" of the account's use in Internet gambling. Actual knowledge is defined as when a bank is alerted by a compliance officer.
While the procedures do not seem to tighten the noose around the necks of online casinos more than it already is, the repeal of this expensive, messy, and ill-conceived legislation will be a day to rejoice.
