GPWA Times Magazine - Issue 7 - January 2009

GPWA Times | T he U.S. Department of Treasury and Federal Reserve announced a joint rule in November to implement and enforce the Unlawful Internet Gambling Enforcement Act. The rule relies on financial institutions performing due diligence on corporate cus- tomers to ensure they’re not processing on- line gambling transactions. American financial institutions have been given until Dec. 1, 2009 to comply with the regulations designed to block online gam- bling transactions, including those made through credit cards, electronic funds transfers, and checks. The rule went into effect Jan. 19, 2009. “For purposes of the rule, unlawful Inter- net gambling gener- ally would cover the making of a bet or wa- ger that involves use of the Internet and that is unlawful under any ap- plicable federal or state law in the jurisdiction where the bet or wager is initiated, received, or otherwise made,” the Treasury Department said in a statement. According to the final rule published by the Treasury Department, during the public com- ment period of the pro- posed UIGEA rule, “about 20 commenters, almost all of them depository institutions, noted that not- withstanding the Agencies’ efforts to craft a reasonable rule, the proposed regulation would be unduly burdensome and would re- sult in compliance costs greater than any off- setting societal benefits. “Several of these commenters stated that the rule would adversely affect the competitive- ness of the U.S. payments system, and that the Agencies should be cognizant of the potential for the Act and similar laws to cumulatively cause capital flight and erode the U.S. dollar’s status as the world’s reserve currency.” The Treasury Department says the comments were taken into consideration, but says it be- lieves “that flexible, risk-based due diligence procedures at account opening, such as those set out in the final rule, present the best op- tion for balancing these two interests.” Norway passes its own version of the UIGEA T he Norwegian parliament passed a proposal in December that mimics the Unlawful Internet Gambling Enforcement Act that the U.S. adopted in 2006. The Norwegian measure bans financial trans- actions between the nation’s residents and online gambling opera- tors. It is unlikely the ban will go into effect until mid-2009 at the earliest as regulatory drafting is still required. Also like the situation in the U.S., Nor- way’s Financial Services Associa- tion and other financial institutions are questioning how the enforcement of the ban will work. The amendment was first proposed back in 2007 and at that time it was reported the reason for the proposal was not to protect Norwegian problem gamblers, but to protect government-owned Norske Tipping, the coun- try’s land-based agent for lottery, sports, and insta- games. ButRolf Sims, a legal adviser to Norway’s Ministry of Cul- ture, toldReuters inOctober of 2007 that the reason was because of the growing pub- lic backlash against gam- bling in Norway. “The anti-gambling lobby has got the wind in its sails,” Sims said. “It would be political sui- cide for any government minister to suggest legalizing gambling.” Banks given until Dec. 2009 to comply with UIGEA Webmaster News QUOTABLES “It would be like waving a red flag to a bull.” - Shadow Finance Minister Bob Richards on what it would be like doing to U.S. authorities if Bermuda embraced Internet gambling. “I think it’s extraordinary that a major global company should seek, at this time, to promote gambling on its Internet site.” - Peter Kilfoyle, former U.K. Labor defense minister, after Google decided to allow gambling ads. (Scotsman UK) “One of the challenges that has plagued the casino industry for a long time is that we spend money like drunken sailors.” - Gary Loveman (above), chairman and chief executive of Harrah’s Entertainment Inc. WEBMASTER NEWS