In case you missed it, a letter authored earlier this month by Senator Jon Kyl (R-AZ) and Congressman Spencer Bachus (R-AL, pictured at right) called for the December 1st compliance deadline of the Unlawful Internet Gambling Enforcement Act (UIGEA) to be upheld. As it stands, we’re only a few days away from mandatory financial services industry compliance with the UIGEA regulations, which were approved in January as midnight rules by the Bush administration. Let’s recap the letter sent by the two tenured Republican lawmakers.
In October, the Poker Players Alliance (PPA), the poker industry’s 1.2 million member strong lobbying force, issued a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke in conjunction with the National Thoroughbred Racing Association and the American Greyhound Track Operators Association. The note encouraged delay of UIGEA regulation enforcement by one year until December 1st, 2010 while effective internet gambling legislation could be crafted.
Around the same time, Congressman Barney Frank (D-MA, pictured at right) and 18 other members of the House Financial Services Committee issued a letter to the same two government officials also calling for a delay. This month, however, Kyl and Bachus reached out to Geithner and Bernanke with a dissenting opinion, claiming, “We strongly oppose this request and believe there is no justification for delaying the compliance deadline of the UIGEA regulations.” Bachus is the Ranking Member of the House Financial Services Committee, of which Frank is the Chair, while Kyl is the Senate Minority Whip. Both have been in their respective chambers of Congress since the mid-1990s.
The letter notes that current regulations being crafted have the rules of the UIGEA in mind and no uproar over the UIGEA has occurred. Kyl and Bachus note, “Members of the financial services industry did not petition to have the Final Rule amended. To the contrary, when the Federal Reserve issued proposed regulations this August regarding the Truth in Lending Act, the Board specifically crafted its proposal to accommodate the UIGEA regulations.” The UIGEA was passed in the final minutes of the 2006 Congressional session at the urging of then-Senate Majority Leader Bill Frist (R-TN, pictured at left). It was not debated in the Senate and instead was attached to the SAFE Port Act, which was approved by unanimous consent.Kyl and Bachus frankly stated, “Moreover, the letter suggests that the Treasury Department and the Federal Reserve should take action because Congress is ‘likely to move’ legislation to the same effect. This is a blatant attempt to circumvent the democratic process by influencing the Treasury Department and the Federal Reserve to take action that cannot possibly be enacted by Congress.” Lawmakers have been bogged down with the lackluster state of the U.S. economy as well as sweeping health care reform, which has left very little time for issues like internet gambling to be discussed.
The two Republican lawmakers add that the effects of the proposed rules should be monitored: "We do believe that the Treasury Department and the Federal Reserve should carefully monitor the effectiveness of the UIGEA regulations after they go into effect and consider modifications should they prove necessary. But simply delaying the compliance date serves no interest except that of the internet gambling enterprises that have long evaded American gambling laws."
Frank has introduced a pair of bills that, if passed, would alter the internet gambling and online poker industries in the United States. HR 2267 establishes a licensing and regulatory framework for internet gambling companies to solicit U.S. customers. It sports 63 co-sponsors and was introduced in May on the same day as HR 2266. The latter bill delays mandatory financial services industry compliance with the regulations of the UIGEA until December 1st, 2010. No movement on either bill has taken place and HR 2266 may be moot if the December 1st deadline passes.
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