PLAYERS:

Luckbox | Otis | G-Rob

About the Up For Poker Blog

Up For Poker Blog Categories:

2006 WSOP
2007 World Series of Poker
2008 Belmont Stakes
2008 Kentucky Derby
2008 World Series of Poker
2009 WPBT Winter Classic
2010 WPBT Winter Classic
American Idol 2009
B&M Poker
Bad Beats
Betting the Ponies
Bradoween
Craps
Disc Golf
Fantasy Sports
Frolf
G-Rob's Thoughts
Game Review
Home Games
Horse Racing
Internet Gambling Bill
Las Vegas
Lefty's Thoughts
Luckbox Last Longer Challenge
Luckbox's Thoughts
March Madness
Movie Previews
Movie review
NCAA Basketball
NETeller News
NFL Football
Online Poker
Online Sports Betting
Other Gambling
Otis' Thoughts
Pick 6
Playing For Fun
Playing For Money
PLO
Poker Blogger Tournaments
Poker Blogs
Poker in the News
Poker Law and Legal News
Poker Movies
Poker on TV
Poker Players
Poker Psychology
Poker Theory
Poker Web Sites
Pot Limit Omaha Strategy
Reading Material
Sports Betting
The Nuts
The Playboy Mansion
Tournament Action
Tuff Fish Appreciation Society
Tunica Tales
UIGEA
Underground Games
Up for Poker News
WPBT Holiday Classic Trip

Previous Hands:

December 2010
November 2010
September 2010
January 2010
December 2009
November 2009
April 2009
March 2009
February 2009
December 2008
November 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003
September 2003

Powered by:
Movable Type 6.3.7
Poker Blog established in 2003 as the first stop for poker news, poker stories, and bad poker advice.

April 3, 2008

UIGEA: Troubled child of troubled parents

by Otis

"I am not a biblical scholar," Rep. Barney Frank admitted of his inability to understand. The conservative mores of his colleagues on the other side of the aisle are confounding to some members of Congress. "But I can't find an exemption for horse racing!" The sport of kings' absence in the good book notwithstanding, Frank had a point.

The scene was Wednesday's House Financial Services Committee's Subcommittee on Domestic and International Monetary Policy, Trade and Technology hearing and a debate that should've been conducted before the Unlawful Internet Gambling Enforcement Act became a reality (UIGEA live blog ).

Frank, one of the UIGEA's most vocal opponents, was pointing out a common theme in America's stance on federal gambling law enforcement: hypocrisy. It's an environment where gambling on juiced up athletes and ponies is perfectly acceptable, but betting on a skill game over which the player can affect the outcome is not.

The Committee hearing was one of the--if not the first--public discussions of the UIGEA, a law attached to must-pass port security legislation and spirited through the halls of the Capitol in the waning moments of the 2006 Congressional summer session. After nearly two years of being a burden only on confused government regulators, the law now threatened to disrupt the lives of many more people.

The summer of 2006 was a heady one for Senator Bill Frist and a small cabal of Republican members of Congress. Frist smelled the Republican nomination for President and he needed friends in some key early primary battlegrounds. Frist wanted it and he was going to get it.

The steamy Washington D.C. summer turned Frist into an irresponsible and randy teenage boy. He wanted it. He didn't care who he had to manipulate to get it. To get what he wanted, he had to ignore the potential consequences of his actions and accept he would be saddling others with a long-term burden. He was the selfish father of a throwaway kid. Now, as Frist tries to figure out who he can count on to make him governor of Tennessee, the progeny of his carelessness and ambition has become everybody else's problem.

If you're just now learning of UIGEA or haven't yet paid enough attention, it breaks down like this: A service that provides gambling on games subject to chance, except for horse racing and fantasy sports, is now considered criminal by the federal government. The UIGEA does not provide funding for the enforcement of its mandates. Rather, it forces American financial institutions to police gambling providers, determine whether they are breaking the law, and then stop doing business with them.

The financial institutions collective, along with UIGEA detractors, say it is well nigh impossible for the banks to be responsible for policing the anti-gambling laws. One of the strongest arguments is that banks, credit card companies, credit unions, and wire transfer companies have no way of knowing from one day to the next who is a bad guy and who is not. The UIGEA does not outline, except in broad terms, which companies break the law. Further, government regulators at the Federal Reserve and Department of Treasury have not been able to come up with an adequate list they can provide to the banks. At this point, the banks would not only suffer the financial burden of policing the internet, but also the ambiguity of the law itself.

UIGEA proponents don't buy it. The national sports leagues (yes, those that benefit so grandly from fantasy sports) are strongly in favor of getting UIGEA regulations finalized tout suite. "There should be no difficulty in identifying and blocking financial transactions directed at promoting sports betting," the leagues wrote in a letter to the Committee.

Proponents, like Alabama Republican Congressman Spencer Bachus, believe it is entirely possible to create a list of offenders like that of the Department of Treasury's Office of Foreign Assets Control. Rep. Bachus, despite having a last name worthy of some envy, likely loses a lot of credibility when he puts up statistics that suggest 74% of internet gamblers became addicted and many of those have turned to crime.

Regardless, the reality is that Treasury has, in fact, built the kind of lists about which Bachus and the professional sports leagues speak. They exist. According to Bachus, the NCAA has identified a list of 900 such gambling entities that can be considered illegal from which the banks could identify the illegal companies. Moreover, there are lists the banks and Department of Treasury use to battle money laundering.

Regulators seemed duly nonplussed. "Money laundering is a global concern," said Louise Roseman at the hearing. Her point? Banking is not a business exclusive to America. Banks all over the world work together to fight money laundering. Those same banks that walk in lockstep in that battle would be put at odds if the same sort of cooperation was expected to fight gambling. After all, in most countries in the world, gambling on the internet is not illegal. What's more, it's big business.

The financial services industry is beside itself. Wayne Abernathy represented the American Bankers Association at the hearing. No one--least of all the regulators, but including the banks themselves--has any idea how much the UIGEA will cost American banks. The financial burden aside, the banking industry points out the law will result in a no-win situation for the customers. Abernathy said the UIGEA will force banks to either be unfairly restrictive or "highly intrusive." Banks would have to take a gamble of their own. They could allow customers their privacy, but in an abundance of caution be forced to close the accounts of law-abiding entities. In the alternative, they could be more diligent, but be forced to dig deeper into their customers' private transactions.

Among the bills in Congress that seek to undo the confusion caused by the UIGEA is Rep. Barney Frank's HR2046. The bill, as outlined in the official Q&A, would "establish a regulatory and enforcement framework to license companies to accept bets and wagers online from individuals in the U.S., to the extent permitted by individual states, Indian tribes and sport leagues." Frank's bill has the most support of any right now, but there is no reason to believe it has any chance of making it out of committee this year. For Frank's efforts to be successful, a new administration needs to be in place. Optimists can look to this time next year before getting excited.

For now, the only plausible option for lawmakers is to continue working with the existing law and try to work out regulations that will satisfy both the law and the reality of the situation, a proposition that very well may be impossible.

Subcommittee chairman, Luis Gutierrez said it well. "Our time would be better spent restricting predatory lending," he said. That is, lawmakers have more important work to do than babysit Bill Frist's throwaway kid.

Other coverage

UIGEA Hearing Live Blog

Associated Press

Hard-Boiled Poker

Poker Works

| Internet Gambling Bill , | Poker Law and Legal News , | Poker in the News , | UIGEA