November 28, 2009
Internet Gambling Ban Delayed
The US Treasury Department and the Federal Reserve central bank say they will be granting American financial institutions an extra six months to comply with new legislation to outlaw Internet gambling, pushing the deadline back from December 1 of this year to June 1 of 2010.
Key congressional leaders hope to repeal this piece of Bush-era legislation and replace it with a Democrat-crafted version.
In its current form, the legislation makes it illegal for banks or other financial institutions to allow their customers to pay for their online gambling activities using credit cards, checks or electronic fund transfers.
Representatives of the financial industry had strongly protested the legislation and asked for a 12-month deferral on the grounds that the law did not clearly define "Internet gambling" and would thus be extremely difficult to comply with.
Under former President Bush, regulators had been authorized to enforce the law in November of 2008, with the official compliance date beginning on December 1, 2009. But on Friday, with just days left before the law was scheduled to go into effect, the Treasury department and the Fed announced that a number of Congressmen had petitioned for a delay in the law's implementation in order to allow for a clarification of a number of its terms.
After numerous financial organizations and representatives from the gambling industries had sent a number of official letters requesting a delay, both federal agencies stated that sufficient cause had been provided to warrant a six-month postponement of the law's enactment.
Democratic Chairman of the House Financial Services Committee Barney Frank hailed the Treasury and Fed's move as an act of wise moderation.
"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," said Frank in an official statement.
Mr. Frank is also the key sponsor of a new piece of legislation that will seek to repeal the 2006 ban altogether and replace it with a law that would grant the Treasury Department regulatory oversight of the nation's Internet gambling companies. Frank contends that while online gambling should be kept legal for the sake of personal freedoms, the federal government should be able to collect hefty tax revenues by heavily-regulating gambling companies.
The bill had already been the source of legal controversy in some corners of the country.
In September of this year, a U.S. appeals court in Philadelphia maintained the legality of the 2006 legislation after an organized group of offshore gambling companies unsuccessfully challenged the federal law in court on the grounds that it was a violation of privacy rights and was too vaguely defined to enforce.
By some estimates, American gamblers are responsible for nearly half of the global Internet casino industry's $16 billion in annual revenues.
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