Wednesday, February 27, 2008

On the Senators’ Letter Regarding UIGEA Regs

LettersTwo weeks ago, two senators, John Sununu (R-NH) and Pete Domenici (R-NM) sent a letter to the Secretary of the U.S. Dept. of the Treasury and the Chairman of the Board of Governors of the Federal Reserve System. The letter was in regard to the Unlawful Internet Gambling Enforcement Act of 2006, and particularly concerned the proposed regulations currently being contemplated by the feds.

Both Sununu and Domenici are generally considered “conservative” Republicans. I think it is safe to say that neither is particularly interested in making gambling easier for anyone. Neither is listed as a co-sponsor of Barney Frank’s proposed H.R. 2046, the Internet Gambling Regulation and Enforcement Act. Nevertheless, both have a problem with the UIGEA.

The recipients of the letter are the ones whose present charge is to consider the many comments that were submitted in response to the UIGEA regulations. You’ll recall those regs were first made public back in early October, when everyone was given ten weeks or so to submit comments on the regs.

That comment period ended in mid-December, and now the feds are in the process of “finalizing” the regulations. I’ve read various estimates, but it sounds as though this finalizing process should take something like 180 days. Which means it could well be early summer when we hear that the “financial transaction providers” will have to start doing what the UIGEA tells them do with regard to their clients’ transactions with online gambling sites. (Or be guilty of felonies and face the stiff penalties described in the Act.)

Reading through the senators’ letter, it is obvious that Sununu and Domenici have become aware of the many problems with enforcement brought up in the comments to the regulations. (Indeed, they refer to the comments in their letter.) “The effectiveness of any law is reliant on sound implementation,” the senators begin. “Federal regulations are intended to provide clarity and guidance for those subjected to their reach. The value of such regulations is to prevent non-compliance while minimizing wasted effort, time, and cost by those being regulated. Clear rules also promote interstate commerce by facilitating uniform enforcement.”

That sets the tone for the pair’s chief complaint, namely, that the UIGEA is unenforceable and the regulations don’t give financial institutions enough guidance to do what the law is trying to tell them to do. “In failing to provide more detail,” write Sununu and Domenici, “the proposed rules would inordinately burden every bank, credit union, credit card company, money transmitting business and payment system in the country, leading to non-uniform compliance and confusion.” As such, finalization of the UIGEA regs will increase “the likelihood that risk-averse financial institutions will simply choose to block every transaction that may be interpreted or could resemble gambling, whether legal or not.”

In conclusion, the senators “urge” the feds to provide the banks, credit card companies, et al. “a list of restricted transactions and instances that are covered by the law.” (Neither the UIGEA nor the regs even provide clear guidelines for creating such a list, much less an actual list.) They are also requesting that the feds further distinguish what activities are covered by federal law (e.g., sports betting) and what are not.

Reading the senators’ request, a couple of reactions come to mind. Well, three. There’s that same old frustration at the UIGEA -- an unfair, unclear law that should never have been passed and which has created such inordinate (and utterly purposeless) grief for so many. That reaction has been revived again here in yr humble servant.

Setting that response aside, though, a couple of other notions occur to me.

The first is kind of a mixed reaction. I’m glad to see these senators taking to heart the primary issue brought up in the comments to the regulations. And I’m also glad to see them trying to encourage the folks who really matter here -- the Treasury Dept. and the Federal Reserve System -- to pay attention to those comments as well.

Even so, my appreciation of the senators’ efforts is compromised by a sense that their letter will not have much of an effect on the finalizing process. Sort of feels like one of those “resolutions” a non-authoritative body might declare, hoping that those who really have the authority might bother to consider their feelings on the matter. Frankly, I don’t see the feds caring too much what a couple of senators might be saying at this point. The Senate passed the UIGEA, so technically, they’ve had their chance to speak on the matter. (I say “technically” because we all know the UIGEA didn’t really receive any actual debate the night it was passed.)

My last reaction concerns what the senators’ letter actually implies, namely, the very real possibility of “non-uniform” enforcement of the UIGEA. My sense is the letter further confirms the threat of banks of “overblocking” transactions that seem as though they might be covered by the UIGEA. Wrote a bit about this back in November.

We Americans are still enduring certain, specific hassles when it comes to funding and withdrawing from online poker accounts. And, of course, there are a number of sites that won’t allow us to play at all. Still, I think overall we are in a fairly comfortable place with our ability to play online poker -- much more so than in late 2006. However, all that could change very quickly this summer the first time our bank says it won’t cash a check sent to us from an online poker site.

What are we gonna do then? Write some more letters, I suppose.

Labels: , ,


Post a Comment

<< Home

Newer Posts
Older Posts

Copyright © 2006-2016 Hard-Boiled Poker.
All Rights Reserved.