US authorities have promised a hearing in early April to explore the burden
on US financial institutions to comply with the
Unlawful
Internet Gambling Enforcement Act of 2006.
The Act is intended to deter illegal internet gambling activities, as support
for legislation to regulate internet gambling continues to gain momentum.
Congressman George Miller signed up last week as a co-sponsor of the bill
introduced by Congressman Barney Frank, chairman of the
House
Committee on Financial Services.
"The banks have a lot of other things to worry about right now," said Frank,
referring to the mortgage crisis and other challenges. "I do not think poker
should be one of them."
Hundreds of comments submitted to the
US
Department of the Treasury and the
US
Federal Reserve are understood to highlight the ambiguity in the proposed
rules to implement the Unlawful Internet Gambling Enforcement Act 2006.
One of the major criticisms is that the rules do not clearly differentiate
between legal and illegal internet gambling activities.
Concerns raised by the
American
Bankers Association and others state that the proposed rules will be a
compliance trap and are not likely to stop citizens gambling with foreign-based
internet gambling operators.
"This hearing is significant and must address the issues being raised by the
financial services sector and others," said Jeffrey Sandman, spokesman for the
Safe
and Secure Internet Gambling Initiative.
"The proposed Treasury Department regulations are unclear, burdensome and
untenable. It becomes clearer each week that the attempt to prohibit internet
gambling activity is doomed to fail.
"Rather than waste valuable resources attempting to enforce the Act, the US
should instead regulate and tax internet gambling."
The Act would require licensed operators to put in place safeguards to
protect consumers, and ensure that the individual placing the bet or wager is
physically located in a jurisdiction that permits a particular form of internet
gambling.
US states would also have the right to control what, if any, level of
internet gambling is permissible within their borders, and could apply
additional taxes and restrictions.
A companion piece of legislation that would ensure the collection of taxes on
regulated internet gambling activities was introduced earlier this week by
Congressman Jim McDermott.
The Internet Gambling Regulation and Tax Enforcement Act of 2008 strengthens
provisions in an earlier version of the bill introduced last year.
A recent letter sent by Congressman McDermott to fellow members of Congress
stated that, according to a
tax
revenue analysis prepared by
PricewaterhouseCoopers,
taxation of internet gambling is expected to generate between $8.7bn to $42.8bn
in federal revenues over its first 10 years.
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