UIGEA Regulations

[resipsa]

Any thoughts on the UIEGA Regs promulgated today? Here's the link for anyone that hasn't seen them yet:

http://www.federalreserve.gov/newsev...20081112a1.pdf


Its a lot to wade through...I think my initial take is that it is probably about what was expected as it really doesn't clear up the ambiguity of the Act and puts all of the enforcement responsibility on the banks. While the banks have until Dec 1, 2009 to comply, I think it can reasonably assumed that they are likely to have whatever procedures they plan to adopt in place before that date.

On the positive side, in the preamble it clearly states that the restricted transaction definition only applies to funds going to an online gambling site, not funds coming from an online gambling site going to an individual gambler (i.e., deposits are subject to the regs, not withdrawals).

I think the biggest concern is that these regs incentivize banks, which are generally conservative institutions to begin with, to error on the side of setting up procedures that create excess blocking of transactions rather than being more lax and letting too many transaction through that might violate the Act. There is pretty much no penalty for overblocking as long as the procedures that were in place caused a reasonable belief that it was a restricted transaction, but banks could be liable for unblocked restricted transactions (although if reasonable due diligence procedures are in place, it would require actual knowledge that the transaction was a restricted transaction).

[Jeremy]

I haven't had time today to sift through the entire document, but from the initial look at it, I think it still leaves a tremendous gray area for banks. Unfortunately for U.S. banks, online gaming processors are way more savvy than they are when getting transactions through. No UIGEA or government will ever be able to stop this.

At a sportsbook I occasionally "donate" to, my deposits show up as coming from a luggage website! No shit, true story.

The UIGEA is the wrong answer and will only scare rooms to leave the U.S. It will never be able to enforce anything though unless of course the govt. starts penalizing banks for doing business with a luggage company and having no idea or way to know it was online gaming.

[PokerNations]

I think it's great they have until Dec 2009 to become compliant. That gives us time to fight and hopefully repeal this b.s. and make positive inroads for the industry.

Especially with the new administration coming onboard in Jan 2009, we should have an easier time of things moving forward for the next 4 years.

[pipeline]

I hate to pimp my own shizzle, especially on the first post but it's the only legal review so far from Gambling Law Professor I. Nelson Rose.

The title is pretty promising and Im sure the sites will do what they already do about credit cards.....

The New Internet Gaming Regulations: Nothing Changes

[Jeremy]

I hate to pimp my own shizzle, especially on the first post but it's the only legal review so far from Gambling Law Professor I. Nelson Rose.

The title is pretty promising and Im sure the sites will do what they already do about credit cards.....

The New Internet Gaming Regulations: Nothing Changes

Fucking spammers......... Haha just kidding. You have the most popular site on the net for these type of updates. Good stuff man.

[pipeline]

....and I know how much you like to read legal stuff. You probably won't even click the link, ha. It is actually one of his best articles.

[Trikkur]

can anyone explain to me what the difference between this and the "previous" UIGEA was. I thought this was already in affect, what has changed?

[resipsa]

can anyone explain to me what the difference between this and the "previous" UIGEA was. I thought this was already in affect, what has changed?

The UIGEA was passed by Congress and signed by the president in Sept/Oct of 2006. The act itself didn't have any enforcement mechinism, it called for the Treasury Department to issue regulations in order to specifiy how the Act was to be enforced with respect to banks and other financial institutions.

In October 2007, The Treasury and Board of Governors of the Fed Reserve jointly issued proposed regulations. These proposed regs didn't have any force of law, they were just issued to provide the banking community with information on what the future regs might look like and invite their comments.

Yesterday, after reveiwing the official comments on the proposed regs and making some changes to accomidate them, final regs were promulgated. These regs do have the force of law, and officially are effective Jan. 19, 2009 but compliance by financial instutions is not required until Dec 1, 2009 (i.e., banks have no liability for allowing restricted transactions until a year from now).

Hope that helps.

[MJ]

Buddy just called to say this was on the radio talk news today being described as "making only poker illegal in the USA Dec 2009

[Jeremy]

It still just amazes me that major networks like ESPN play and replay poker, talk about online qualifiers, and almost EVERY player is representing an online poker site, yet our U.S. government who is letting our U.S. economy deteriorate is still scrambling to fight against "online poker". Give me a break Washington.