Net Gambling Rules An Unfair Burden On U.S. Banks, Group Complains - InformationWeek

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10/29/2007
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Net Gambling Rules An Unfair Burden On U.S. Banks, Group Complains

A pro-gaming group supports improved regulation instead of letting U.S. residents continue online gambling by processing their transactions through foreign banks.

Proposed rules to prevent Internet gambling would place a high burden on U.S. financial institutions, according to an analysis published by a pro-online gaming group.

The Safe and Secure Internet Gambling Initiative announced an advisory report from law firm Alston & Bird on Monday that concludes new rules for Internet gambling place unfair burdens on financial institutions.

The national firm found that, under proposed rules that support the Unlawful Internet Gambling Enforcement Act of 2006, U.S. residents would be able to circumvent regulations and continue gambling online by processing their transactions through foreign banks in jurisdictions where Internet gambling is legal.

"The proposed rules create an unprecedented and unwieldy regulatory burden on the U.S. financial services sector," Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, said in a prepared statement. "U.S. financial service companies are being left to interpret ambiguous state and federal gambling laws, which do not clearly differentiate between legal and illegal Internet gambling activities or transactions, and then implement unreasonable and costly solutions to achieve compliance."

The pro-gambling group supports legislation that would regulate and tax Internet gambling, specifically the Internet Gambling Regulation and Enforcement Act and the Internet Gambling Regulation and Tax Enforcement Act. The companion bills would allow Internet gambling but require operators to obtain licenses, take precautions to prevent underage and compulsive gambling, and ensure safety and integrity of financial transactions.

Proponents of regulated Internet gambling, including the Safe and Secure Internet Gambling Initiative, say that the United States could collect billions in revenue if the government lifts the ban.

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