Barney Frank pushes a new bill to clarify UIGEA

Yesterday Congressman Barney Frank (D-Mass.) introduced the Payments System Protection Act of 2008, which again intends to clarify and curb the UIGEA by determining exactly which gaming activities are to be considered legal.

Frank’s new bill – called HR 6870 – will require the U.S. Treasury, the Federal Reserve and the Department of Justice to collaborate in determining what the jurisdiction of the UIGEA is and which gaming activities are to be considered illegal under it.

One of the main selling points of this new bill is that it hopes to unburden the US financial system, which is not prepared to cope with the task of policing transactions and deciding which transactions to allow and which to block. Jeff Sandman, spokesman for the Safe and Secure Internet Gambling Initiative, made an eloquent point in this respect:

Chairman Frank is doing the right thing by saying it is unfair to burden U.S. financial service companies with the job of the Internet gambling police at a time when their undivided attention ought to be on the economy. The reality is that the UIGEA is dangerous to the payments system and unlikely to stop anyone from using the Internet to play poker, bet on horses, or engage in other types of wagering.

These efforts are supported by the financial sector, as declared by Steve Barlett, president and CEO of the Financial Services Roundtable: "I wish to be clear that we do not support the notion that financial services companies should be 'deputized' to police gambling activity in any form or function." Barlett said this in support of the now defeated HR 5767 after the King Amendment had been made.

Congressman Frank’s latest attempt to fight UIGEA aims to limit the Act’s effects to “wagering of the type that is prohibited under chapter 178 of title 28, United States Code,” which would restrict the UIGEA strictly to online sports betting activities.

Another aim of HR 6870 is to formally define what “unlawful internet gambling” means; this is to be done by appointing “an administrative law judge or similar official” who would carry out “a full economic impact study of the proposed regulations.”

Sources report that HR 6870 has been scheduled for mark-up next Tuesday in the House Financial Services Committee. Frank’s previous attempts to stop UIGEA - in conjunction with Senator Ron Paul - include HR 2046, the Internet Gambling Regulation and Enforcement Act and HR 5767, the Payment Systems Protection Act.