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Poker News | Gambling and the Law

UIGEA Grace Period Ends

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Last year the UIGEA was signed into law with a 270 day "grace period". This grace period is now expired. So what exactly does this mean? If you read the official US Treasury Notice below, you will probably be just as confused as you were before. We shouldn't expect it to be clear and straightforward, this is after all a government agency.

The bare bones of this notice is that now, it is illegal for any financial institution to fund gambling accounts on the player's/customer's behalf. Your bank cannot transfer funds via your bank account or credit card to a gambling site so you can pump up your bankroll. Financial institutions must have safe guards in place that are "reasonably designed to identify and block" any transactions that are in connection with online gambling. The law doesn't say you can't play online, just that payments (deposits) made through US-based banks, credit cards, and other systems are prohibited.

The US has taken the stance that any bets made in the US, regardless if it is an offshore casino or not, is in violation of the law. Antigua & Barbuda have won its claim against the US that the law was an unfair trade restriction, which the US is now appealing.

The most confusing part of this governmental can of worms is this statement by the US treasury; "The US Treasury and Board of Governors of the Federal Reserve System will be accepting comments from the public on their proposed rules until December 12, 2007. The final regulations will take effect six months after the joint final rules are published'.

If you would like to submit your comments on this rule, instructions are found at the bottom of the US Treasury Notice. We should all take the time to submit our comments and take a stand against the UIGEA.

"PROHIBITION ON FUNDING OF UNLAWFUL INTERNET GAMBLING ACTION: Notice of Joint Proposed Rulemaking.

SUMMARY: This notice is published jointly by the Departmental Offices of the Department of the Treasury (the "Treasury") and the Board of Governors of the Federal Reserve System (the "Board") (collectively, the "Agencies") and proposes rules to implement applicable provisions of the Unlawful Internet Gambling Enforcement Act of 2006 (the "Act"). In accordance with the requirements of the Act, the proposed rule designates certain payment systems that could be used in connection with unlawful Internet gambling transactions restricted by the Act. The proposed rule requires participants in designated payment systems to establish policies and procedures reasonably designed to identify and block or otherwise prevent or prohibit transactions in connection with unlawful Internet gambling. As required by the Act, the proposed rule also exempts certain participants in designated payment systems from the requirements to establish such policies and procedures because the Agencies believe it is not reasonably practical for those participants to identify and block, or otherwise prevent or prohibit, unlawful Internet gambling transactions restricted by the Act. Finally, the proposed rule describes the types of policies and procedures that non-exempt participants in each type of designated payment system may adopt in order to comply with the Act and includes non-exclusive examples of policies and procedures which would be deemed to be reasonably designed to prevent or prohibit unlawful Internet gambling transactions restricted by the Act. The proposed rule does not specify which gambling activities or transactions are legal or illegal because the Act itself defers to underlying State and Federal gambling laws in that regard and determinations under those laws may depend on the facts of specific activities or transactions (such as the location of the parties)."

You may submit comments, identified by Docket Number R-1298, At the Federal eRulemaking Portal: http://www.regulations.gov . Follow the instructions for submitting comments.
E-mail: regs.comments@federalreserve.gov . Include docket number in the subject line of the message.

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