First Step for H.R. 6870, the Payments System Protection Act of 2008

The Payments System Protection Act of 2008 (H.R. 6870) has made it through the initial committee consideration and markup phase and thus remains on the table to be considered further by the rest of the House of Representatives.

The Poker Players Alliance (along with many others) have come out to say how pleased they are about Tuesday’s affirmative vote of the House Financial Services committee (30 ayes, 19 noes, 21 did not votes). In his statement, PPA Chairman and primary spokesperson Alfonse D’Amato congratulates the committee and says “we look forward to enactment of this sound public policy during this legislative session.”

I was unable to watch the hearing or vote on Tuesday, but have caught up a bit during the week. Head over to the PPA site for its selected coverage of the hearing, if yr into that sort of thing.

Looking more closely at the bill itself, H.R. 6870 certainly does seem like something online poker players should indeed be enthused about -- much more so that some of the other UIGEA-related bills that have been proposed over the last 18 months.

I mentioned H.R. 6870 in passing on Tuesday, expressing a bit of cynicism about the vagueness of its expressed intention “to ensure...[the UIGEA] does not cause harm to the payments system.” The bill itself, however, is quite clear in the way it expresses its purpose.

There are three sections. The first gives the bill its title.

The second section specifically prohibits the Secretary of the Treasure and the Board of Governers of the Federal Reserve System from finalizing those UIGEA regs, other than to “the extent as any such regulation pertains” to sports wagering (such as was already made illegal by the 1961 Wire Act) or to what the bill says in section 3. This is the section that makes online poker players happy, as it spells out that the UIGEA cannot specifically be used (right now, anyway) to make “financial transaction providers” stop us from sending money back and forth to online poker sites.

The third section looks to the future, providing a directive to the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to keep studying all of this and “jointly develop and implement regulations...that shall include a definition of the term ‘unlawful internet gambling’...after conducting a full economic impact study of the propsed regulations.”

This little addendum, in fact, is where the title of the bill was taken. In essence, the charge to the feds here is for them to continue to try to assess how the UIGEA would affect the banking system should it be extended to apply to other forms of gambling than just sports wagering. What is only being implied here is that if it is determined extending the UIGEA to those other forms of online gambling would harm the banking system, then those additional regs wouldn’t be implemented. (That’s the vagueness I was talking about on Tuesday.)

As Pokerati Dan has alluded to a couple of times this week, the timing for the proposal of a bill called the “Payments System Protection Act” is perhaps fortuitous given the various crises that have recently befallen the stock market and, in particular, the American banking system. You probably heard about the government bailing out American International Group (AIG) this week, a company whose failure would gravely affect U.S. banks who are its clients. It certainly looks as though the payments system needs protectin’ these days....

By giving H.R. 6870 that title -- rather than, say, the “UIGEA Prohibition Act” or something (which is how H.R. 5767, which failed to get out of committee, was essentially presented) -- Frank emphasizes the dire practical consequences of the UIGEA as had been outlined quite extensively in that hearing back in April. A great strategy, really, to focus on how passing the bill will help alleviate stress on the banking system, and not to speak so directly of our rights to gamble online, an argument which never seems to appeal to a majority of legislators.

That change in emphasis may well help H.R. 6870 gather some momentum, although time is running out on this session. A bit amusing, actually, to see folks in the forums hoping it gets tacked onto some other “must-pass” legislation in the same way the UIGEA about this time two years ago. (Outrage at Bill Frist’s underhandedness there would surely be forgotten if the same tactics were used for our benefit, yes?)

That could happen, actually. In any case, we’re still a good ways away from seeing this thing through. Remember the song. We hope and pray that it will but today it is still just a bill.