HR 5767, Aimed To Halt UIGEA, Defeated By Split Vote

It was a sad day for online gambling operators and US players alike as Bill H.R. 5767, proposed by Rep. Barney Frank [Mass] and Rep. Ron Paul [Texas], with a crucial amendment from Rep. Peter King [NY], was smacked down by a split vote of 32-32. HR 5767 would have halted the US Treasury Department and Federal Reserve from “proposing, prescribing or implementing” any regulations under the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, while forcing the government to define “unlawful Internet gambling”, thereby taking the heavy, unsolidified burden off US financial institutions.

H.R. 5767, otherwise known as the Payment Systems Protection Act, would have taken the scrutinizing eyes of the government off the backs of US financial institutions, who are at this time held responsible for the illegal processing of fund between online gambling operations and US residents, even though they have not been told what constitutes legal and illegal online gambling. The bill would have required federal regulators to specifically define what is and is not illegal gambling, thereby giving financial institutions a clear guideline.

As it stands now, these companies are expected to enforce something they cannot comprehend. The UIGEA fails to offer proper regulations or definitions. Therefore, the defeat of H.R. 5767 is not just a blow to the online gambling industry, but a virtual earthquake in the United States, with aftershocks felt round the world.

Allow me to explain…

During the mark-up session of H.R. 5767, an amendment was proposed by Rep. Pete King [NY], and subsequently adopted by the Committee, that would halt implementation of the UIGEA, as well as forcing a uniform definition of “unlawful Internet gambling”.

King emphasized that this “was a banking issues, not a gambling issue” and that it shouldn’t be the banking industry’s responsibility to determine what is and is not unlawful gambling. “This is a banking amendment, not a gambling amendment,” King stressed to the Committee. “I hope this will be considered in a non-partisan way… not whether you are opposed to gambling or not. Let’s take our time and have regulations that mean something.”

Unfortunately, the Republican side of the Committee focused merely on the morality issues of gambling, seeming to disregard the absurdity of the UIGEA as it stands now. No clear definitions, no regulations and no guidelines. In fact, every deadline presented by the government to established guidelines has been missed, time and again.

Former Senator Alfonse D’Amato, now an influential component of the 1-million member Poker Players Alliance, had plenty to say about the Committee’s lack of concern, calling the current state of the UIGEA “a completely unworkable and unenforceable bill that would do little to address the main concerns of its sponsors – namely, protecting underage and compulsive gamblers as well as cracking down on money laundering…. Unfortunately, debate over the morality of gambling trumped debate on the fact that UIGEA is completely ineffective and unenforceable.”

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