Money Laundering Expert Says Online Gambling Ban Failing

A former IRS agent who specialized in detecting money laundering told US Representatives that the online gambling payment ban is lacking proper regulatory structure.

During this week's testimony on online gambling and the UIGEA ban before the US House Financial Services Committee, a former IRS and White House staffer specializing in preventing money laundering and terrorist financing told Congressmen that the plcok on payment transactions to online casinos was not properly stopping criminal activity. James Dowling, currently of the Dowling Advisory Group, said asking financial institutionsto enforce vaguely defined concepts on illegal online gambling is ineffective.

Dowling did warn that existing methods of regulating online casinos, including dependence on foreign licensing and oversight, left gaping holes that money launderers could exploit. The varying level of testing and observance by a host of regulastory systems results necessarily in some Internet gaming sites escaping proper supervision.

But strict and well-organized regulation by US authorities would ease the burden of the UIGEA from stressed US financial services, say gambling representatives. And establishing a clear set of qualifications for US licensing could alleviate the problems created by depending on foreign regulation.

"Law enforcement agencies and regulators report the need for and implementation of suitable tools that carry effective, proportionate and dissuasive sanctions to use in the regulation of casinos," stated Dowling. He added that current regulation from overseas does not meet these standards, leaving US consumers unprotected.

Dowling did mention the ease of placing physical regulators at land casinos, as opposed to dealing with Internet anonymity. Clearly, technology to regulate online gambling must be well-vetted and reliable to secure the protection US residents deserve.