GPWA Times Magazine - Issue 8 - April 2009

72 GPWA Times | While Obama can easily halt all pending regulations from being implemented, reversing rules that went into effect prior to his inauguration — like the UIGEA — is much more difficult. OBAMA brings hope, but the UIGEA is here to stay for now Photo by Pete Souza/Obama-Binden Transition Project Obama brings hope, but the UIGEA is here to stay for now NEWS ANALYSIS By Vin Narayanan I n the opening days of the Obama administration, there was a flurry of activity, including a halt on all pending regulations. But one thing that is not likely to be reopened for debate is the UIGEA regulations. While President Barack Obama can eas- ily halt all pending regulations from being implemented, reversing rules that went into effect prior to his inauguration — like the UIGEA — is much more difficult. Once a rule (which is essentially a set of regulations) is announced and in the books for 60 days, it becomes law. And by finalizing and announcing the UIGEA regulations in early November, the Bush administration easily beat the deadline. That means the regulations that went into effect January 19 cannot be overturned easily. There are essentially three ways to over- turn the UIGEA regulations. The first is for Obama to ask the Treasury Depart- ment and Federal Reserve for a new rule to govern the UIGEA. That would initiate a lengthy rule-making process, similar to how the first set of UIGEA regulations was crafted. But with the U.S. economy in the tank, it is unlikely that either department will want to tackle this issue in 2009. The remaining two methods for pre- venting the UIGEA from being enforced involve legislative solutions. Congress could pass legislation that delayed the implementation of the UIGEA until the definition of online gambling was clari- fied. A measure, sponsored by Rep. Bar- ney Frank (D-Mass.), was passed by the House Financial Services Committee in September. It’s likely that Frank will re- introduce a version of this bill this year. But as we saw in 2008, getting this legislation through Committee was very tricky. And whether the full House or Senate would ap- prove the measure is anybody’s guess. Congress could also choose to repeal the UIGEA outright and set up a regulatory framework for online gambling in the U.S. In fact, Frank was ex- pected to introduce legislation in March that would have done just that. But the odds of this passing both the full House and the Senate are slim at best. As we noted earlier, a House committee barely agreed to delay the implementation of the UIGEA. Getting a House committee and the full House to agree to repeal the UIGEA this year would consti- tute a minor miracle. Combine that with the fact that the legislation would then need Sen- ate approval — where more than a few con- servative Senators would be willing to launch a filibuster — and the road ahead becomes truly daunting. So will the UIGEA regulations as they stand right now last through the year? Probably. That’s not to say that change can’t happen this year. Momentum is building toward it, so it can happen. And I hope it does. But the reality is that the Obama administration and Congress will be focused on other problems in 2009, and that federal progress on online gam- bling in the U.S. might have to wait for another year.

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