Bill to Prevent Gambling Payments Causes Confusion and Uproar

The Poker Players Alliance makes a strong argument their sport should not be included, as it is a game of skill, rather than chance.

The Unlawful Internet Gambling Enforcement Act of 2006 has been in effect for almost two years, and still no one seems able to clearly explain the provisions of the bill, nor able to defend its violations of other United States laws, treaties, and agreements. Even government departments are unable to agree how the law is to be applied, rendering it all but impossible for affected institutions to determine what they are allowed to do.

Senators John Sununu and Pete Domenici have asked regulators from the Treasury Department and the Federal Reserve to devise a specific list of forbidden transactions. Since the law places the burden on financial institutions to make a "reasonable effort" to prevent payments to online gambling sites, whether by use of check, credit card, or electronic transfer, some are worried that banks and credit card issuers will err on the side of caution, refusing actions that may be legal.

Furthermore, exceptions noted in the bill cause more problems. Exempted from the law are Indian casinos, state-licensed casinos, and horse racing; but there is still a thirty-year-old debate between the Treasury and Justice Departments on the legality of horse betting across state lines. A spokesman for the American Bankers' Association said, "If the federal agencies themselves cannot agree on the law, what hope is there that banks can resolve these confounding legal issues?" 

Payment is illegal when involving games of chance, but those games are not defined. The Poker Players Alliance makes a strong argument their sport should not be included, as it is a game of skill, rather than chance.

Other countries have complained vigorously about the bill as an illegal restraint of trade. If gambling in a certain form is legal somewhere in the U.S., free trade agreements should allow foreign competitors opportunity to market their product. Yet, while sportsbooks are everywhere in Nevada, and being considered in New Jersey, Antiguans taking U.S. sports bets are committing crimes. This has led to censure and penalties against the U.S. by the World Trade Organization.

Joseph Kelly, professor of business law and a leading expert in internet gambling, said, "What is legal now? God only knows." 

Perhaps it is time to junk this horrible piece of legislation and back Representative Barney Frank's bill which would allow, regulate, and tax online gambling.  It is only a question of choosing realism and sanity over problematic confusion caused by political grandstanding.