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Poker News | Gambling and the Law

UIGEA Regulations Finalized, Will Take Effect Jan. 19, 2009

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Representative Barney Frank, Chairman of the House Financial Services Committee, wrote letters to Federal Reserve Chairman Ben Bernanke and Secretary Henry Paulson asking that the Treasury Department not do it. But the Bush administration took advantage of midnight regulations to do it anyway. It finalized the UIGEA regulations and set them to go into effect on January 19th, 2009.

Since the underhanded passage of the UIGEA in October of 2006, Frank and other members of Congress have made numerous efforts to show that the enforcement of the UIGEA would create an undue burden for banking institutions. There was even an April 2, 2008 Congressional hearing at which numerous institutions, the U.S. Department of the Treasury and the Federal Reserve System themselves, declared that the UIGEA was ambiguous, and any benefits to be found by enforcing the UIGEA were far outweighed by the numerous burdens.

In addition, Frank was able to secure passage of H.R. 6870, the Payment System Protection Act of 2008, by the House Committee on Financial Services in September. The important piece of legislation would create a process for online gambling to be dissected into various types of gambling, allowing games of skill like poker to be exempted from the UIGEA. But the bill has yet to be introduced to Congress as a whole for a vote due to other pressing concerns like the now-decided presidential election and the ongoing U.S. financial crisis.

Nevertheless, the Bush administration has its priorities before it leaves Washington D.C. in two months, and finalizing the UIGEA regulations was evidently one of them. On November 12th, it was established that financial institutions would be required to begin implementing UIGEA regulations on January 19th, 2009, just one day before President-elect Obama takes his oath of office, and be in full compliance with the law by December 1st, 2009. The pleas of those institutions for UIGEA clarity have been ignored, and they are being instructed to comply regardless.

The Poker Players Alliance expressed its outrage and disappointment at the decision in the form of a letter to its members by PPA Chairman Alfonse D’Amato. “Today’s action finalizes a truly bad public policy - one that even the banks and federal regulators called unworkable in Congressional testimony,” he wrote. “However, the PPA remains optimistic that the new Administration and the new Congress will recognize the failures of the UIGEA and will act swiftly in the new year to overturn this flawed policy.”

D’Amato continued, “We have strong advocates in Congress who recognize the importance of balancing individual freedom and responsibility with the protection of consumers as it relates to online poker. As such, we believe that in the new political environment UIGEA will be overturned and effective licensing and regulation of online poker will be enacted.”

But within 24 hours, the PPA had issued another statement, this one indicating that the organization that represents well over one million members of the poker community, was preparing for a potential lawsuit against the UIGEA “because its vagueness will likely force banks and other payment processors to over-block lawful internet poker transactions.” The organization is now seeking members who play online poker for a living, whose careers would be jeopardized by the wrongful enforcement of the UIGEA, to join the PPA in the court action.

Anyone who plays internet poker regularly and earns the greater percentage of his or her total income from it, reports it on tax returns, and resides in a state where online gaming is not illegal, is encouraged to contact the PPA at uigealitigation@pokerplayersalliance.org. The PPA will underwrite all costs associated with plaintiffs who agree to be part of the lawsuit and meet all of the requirements.

The PPA does hold out hope that 2009 will be the year, with the Obama administration’s help, that many things will happen to turn this situation around. Not only is there an effort among Congressional Democrats to reverse the midnight regulations policy of the Bush administration, which would also reverse all bills affected by this process, including the UIGEA regulations, but Rep. Frank and others will not cease to pursue their individual bills in Congress that will exempt poker from the UIGEA and further the process to make online gaming legal and regulated by the U.S. government.

But the PPA needs the help of the poker community to accomplish these goals. Contacting one’s members of Congress by e-mail or telephone is one way to let them know how strongly their constituents feel about the issue. It is also important to let the Obama administration know that this is an issue that needs to be considered by them once in office, as it is a key issue in protecting personal freedoms.

Visit www.PokerPlayersAlliance.org for more information on how to help. Make your voice heard.

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