Bill Introduced to Clarify the UIGEA :

A lawmaker from Texas has introduced a bill, if passed, will help clarify which online activities are under the Unlawful Internet Gambling Enforcement Act or UIGEA. This could help enlighten the public and put at end to different interpretations of the UIGEA.

Representative Pete Sessions introduced the HR 6663 or the Unlawful Gambling Enforcement Clarification and Interpretation Act of 2008 last July 30, just days after some of his colleagues inquired with the Treasury Department and Federal Reserve Board regarding clarifications on what should be considered illegal under the UIGEA.

The letter states that there is no clear guidance as to what constitutes unlawful internet gambling. People who play online skill games like poker would like to know the stand of the UIGEA regarding this issue. The lawmakers call the UIGEA a very vague law and its implementation is done in bad faith. They also think that the UIGEA rules and regulations might affect small businesses that might be deemed illegal by the said law. It is as if the authors of the UIGEA have made it ambiguous so that it can be used for various offenses.

The four lawmakers that signed the letter are Christopher Shays, Judy Biggert, Jim Gerlach and Kevin McCarthy. They requested the Treasury Department and the Federal Reserve Board to define what constitutes an unlawful internet gambling activity. It is a gray area that can have various interpretations.

The UIGEA tells banks and other financial institutes to stop any transactions that are suspected of being used in unlawful internet gambling. The lawmakers doubt that banks can do this task because the bill is poorly written. It was hurriedly crafted and was passed in 2006 by the Congress attached to the Safe Port Act of 2006. The bill didn't specifically define what unlawful internet gambling is.

The UIGEA also requires banks to track every online transaction done within the country and stop the ones that are suspected to be used for online gambling. The web sites to be watched are not clearly stated therefore banks could be over suspicious and might stop all transactions that they might see illegal. The targets of this bill are the online betting sites such as slot parlors and online sport books although legal sites might be affected of this law therefore the lawmakers are asking for clarifications.

Banking officials have also showed concerns with the UIGEA because it is far reaching and confusing at the same time. At present banking conditions and implemented systems, banks could not handle processing all the information that the UIGEA is requiring them to do. Without a clear cut definition of unlawful internet gambling, the confusion will continue.

The four lawmakers have voted and supported the UIGEA but they are concerned about the legality and operational aspects of the bill that is open to lots of interpretations. The Federal Reserve Board and the Treasury has promised the lawmakers that they will be coming out with a workable set of rules.

The Treasury Department and the Federal Reserve Board are the two government agencies tasked to write the rules and regulations that banks and other financial institutions will use to look and stop transactions that pertains to illegal online gambling. They find their job difficult because the law is not too clear with regards to which activities should be unlawful.

Session's bill is Congress' first try at explaining which activities would be deemed unlawful by the UIGEA. But HR 6663 singles out sports betting and if this bill is passed then taking online bets from sporting events, as well as facilitating the transactions, will be illegal. Although it still leaves out the possibility that online games such as poker can be legal.

The lawmaker gave some points as to why online sports betting should be unlawful under the UIGEA. He stated that a sport betting in general is illegal in 49 or 50 states and it could lead to the corruption of professional and amateur sporting events. He also said that most federal prosecutions on internet gambling involved sports betting.

These prosecutions began even before UIGEA was made into law and would normally cite the Wire Act which prohibits the taking of bets over state lines. This federal law was enacted to fight organized crimes during the 1960s. This law is still used to prosecute owners or executives of businesses that engage in either online sport books or providing e-wallets that funds these companies.

The Reserve Board and the Treasury Department are still trying to revise the set rules and regulations that the UIGEA introduced last fall. They are having a hard time doing so because of the gray areas and the lack of case history with regards to online gambling. Without these set rules and regulations, the UIGEA can't be used to stop banking transactions concerning illegal internet gaming and gambling.