UIGEA Implementation Most Likely Postponed

November 27, 2009 | News Category: Gaming Law

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It seems that the great efforts of a number of politicians, groups and also some individuals may well have paid off. A number of reliable sources in the financial community reported late on Wednesday that the US Treasury has reached a decision regarding the implementation of the UIGEA (Unlawful Internet Gambling Enforcement Act). A compromise on the UIGEA's implementation date has been reached.

Representative Barney Frank and a number of other Congressmen requested that the Treasury postpone the December 1st UIGEA implementation date by one year. The Treasury seems to have reached a compromise, and postponed it for six months instead.

Although the official and formal announcement is yet to come, it seems likely that the Treasury will make an announcement on either Friday or on Monday, since the implementation date comes up on Tuesday.

Those companies, including banks, that provide financial payment processing transactions for online gambling sites, were ordered to comply with the UIGEA by December 1st. There has been much confusion in the payment processing world as to which gambling payments need to be blocked, and which do not. This has caused many problems, since payments that should not have been blocked, such as lottery payments, have found themselves blocked too, as financial institutions have chosen to err on the side of caution, and reject all gambling transactions, even when they are specifically excluded by the UIGEA.

Earlier in the week, Barney Frank announced that the two online gambling bills that he has authored would be heard in the House Financial Services Committee on December 3rd. Soon after Frank announced this, the news of the likely postponement leaked out.

iMEGA's chairman, Joe Brennan Junior said "It's really surprising we got this concession. It's very unusual for any department of the government to essentially forestall an act of Congress. This is a testament to the power of Congressman Frank. This has been his pet issue, because it is part of his core values for some time now."

The hearings by the House Financial Services Committee are an exciting step toward the possibility of legalization and regulation of online gambling, and the abolishment of the UIGEA.

John Pappas, the executive director of the PPA, observed the following about the hearings: "We thought it would probably have to wait until January, so we're pleasantly surprised to see this happen in December. I think Barney is sending a strong message to regulators and others that he's serious about changing this law. He's going to move forward with his plans to license and regulate this industry."