A Separate Bill to Prevent UIGEA Online Casino Ban

May 07, 2009 | News Category: Gaming Law

0 Comments Barney Frank was full of surprises, as was seen with his new bill to regulate and legalize online gambling. What was not expected was that he would introduce two separate bills at the same time.

The focus of the first bill is on legalization and regulation of Internet gambling, while the second bill, which is tied in very closely with the first bill, is a preventative measure. It was created to prevent the implementation of the Unlawful Internet Gambling Enforcement Act's (UIGEA) ban on the processing of financial transactions for online casinos.

The bill describes Frank's gambling licensing act, which exempts online gambling sites and financial institutions from any penalties connected to the UIGEA. The bill reads, "No financial transaction provider shall be held liable for engaging in financial activities and transactions for or on behalf of a licensee or involving a licensee, including payments processing activities."

There have been exemptions that have been granted to protect online gambling that is still considered legal, such as state lotteries, where players can buy their tickets online. These exemptions, however, have not protected New Hampshire and North Dakota's state lotteries from running into problems when overly concerned credit providers also blocked the lottery transactions along with online casino transactions.

Barney Frank brought forth the Reasonable Prudence in Regulation Act in order to safeguard financial institutions and state lotteries from re-occurrences and disruptions such as have taken place in recent months leading up to the UIGEA's deadline for financial institutions to institute the ban.

The UIGEA rules give financial institutions until 1st of December, 2009 to ensure that the financial transaction ban is in effect, before facing mandatory enforcement. The new bill that Frank has presented changes that deadline to a year later, extending it until 1st of December, 2010.

The new deadline suggested by Frank would give Congress ample time to withdraw the rules and regulations of the UIGEA before they reach their final implementation deadlines. This would leave the way open for the rules and regulations regarding the licensing and legalization of online gambling in Frank's bill to be adopted.

This second bill, which is smaller and most likely easier for Congress to adopt, should help to ensure that the first bill will work more smoothly without the threat of UIGEA deadlines. It should help to prevent a number of potential conflicts from the UIGEA until enough time has passed for Congress to coordinate the laws.

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