Bet Blockers

In 2006, Congress passed a law that instructed the Treasury Department and the Federal Reserve Board to write regulations aimed at preventing "unlawful Internet gambling." But Congress did not define "unlawful Internet gambling," and neither did the regulators.

Instead, IT issued rules requiring financial institutions to adopt "policies and procedures" that are "reasonably designed" to block transactions associated with unlawful Internet gambling, whatever that might be. Last week, acknowledging the difficulty of satisfying this demand, federal regulators announced that enforcement of the rules, scheduled to begin on Dec. 1, will be delayed until June 1. The six-month extension gives Congress time to reconsider its foolish and futile attempt to stop Americans from betting in their pajamas.

The regulations, required by the Unlawful Internet Gambling Enforcement Act (UIGEA), include a telling explanation of why the government chose not to create a list of bet-taking businesses that financial institutions should avoid. Because the UIGEA "does not set out the precise activities that are covered," the regulators say, "creating such a list would require the Agencies to formally interpret" the relevant state and federal laws. Since those laws are often ambiguous, "interpretations by the Agencies in these areas may not be determinative in defining the Act's legal coverage and could set up conflicts or confusion with interpretations by the entities that actually enforce those laws."

In other words, figuring out which forms of online betting are illegal is so complex and uncertain a task that federal regulators did not even attempt it. Yet that is what they expect financial institutions to do.

The reach of federal gambling laws has long been a matter of debate. While the Justice Department claims the Wire Act of 1961 bans all online gambling, for instance, operators of poker and casino Websites say it applies only to sports betting, a view endorsed by a federal appeals court. The Justice Department also maintains that online horse race betting is illegal, but the businesses that run sites like youbet.com disagree, and so do the states that license them. The UIGEA did nothing to resolve such disputes.

State gambling laws are likewise open to interpretation, especially when it comes to poker, a game of skill that, depending on whom you ask, may not even qualify as gambling. I. Nelson Rose, a Whittier Law School professor who is a leading authority on gambling law, notes that the UIGEA regulations allow a bank contemplating a relationship with an online gambling business to consider "a reasoned legal opinion that it does not engage in restricted transactions" as evidence of its licit status.

Since they could face penalties for helping a business later judged to be unlawful, American financial institutions have a strong incentive to eschew all Internet gambling, even when it's arguably legal. But there are plenty of ways to evade the UIGEA regulations, including paper checks, credit cards issued by foreign banks, and payments funneled through foreign intermediaries. Rose notes that regulators aren't even talking about preventing individuals from placing bets (which in most states is not illegal) or collecting their winnings.

This week, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is holding a hearing on legislation that points the way out of this silly yet burdensome charade. He wants to legalize online gambling at the federal level and allow states to regulate it as they see fit. Frank says his opposition to gambling prohibition is inspired by a simple proposition: "If individuals like doing something and they harm no one, we will allow them to do it, even if other people disapprove of what they do."

Meanwhile, National Endowment for the Humanities Chairman Jim Leach, who was one of the UIGEA's main architects as a Republican congressman from Iowa, is embarking on a 50-state tour to promote greater "civility" in political debates. Too bad he was not polite enough to keep his nose out of the private spaces where millions of Americans choose to spend their money on games that offend him.

Thanks, I appreciate the update.

Now on to my 2 Senators to let them know how I feel.

.....Bob (lokibob on full tilt poker)

Frank says his opposition to gambling prohibition is inspired by a simple proposition: "If individuals like doing something and they harm no one, we will allow them to do it, even if other people disapprove of what they do."

Wow! This philosophy coming from a DemoNazi? I'm stunned. Hey, Mr. Frank! I like freely buying, selling and shooting guns and I've barely hurt so much as someone's feelings. I've never even been in a fist fight. Can we adapt your philosophy to my gun hobby? Yeah, I didn't think so.

If individuals like doing something and they harm no one, we will allow them to do it, even if other people disapprove of what they do."

Gee. Maybe Barney isn't all bad? I wonder if this applies to smoking too.

ML/NJ

It is my money and my choice how I spend it. Done within the privacy of my own home, I’m not hurting anyone but myself. SO LEAVE ME THE HELL ALONE!! And no, try as you might you cannot save anyone from their own self-destructive tendencies.

(Full disclosure: I play a LOT of online poker, at FullTilt and PokerStars.)

I don’t give a DAMN whether you approve of gambling or not. Freedom means being free to follow my own pursuits so long as they don’t infringe on the rights of others. If I am not free, then SAY SO CLEARLY and NOW!

A lot of otherwise freedom-loving FReepers object strongly to gambling, and I’m sure they’ll be along in just a minute to tell you ALL about their objections.

Let’s do this the American way — LEAVE ME THE HELL ALONE!!

Why should the Fed pay any attention to those wankers. The Fed is an independent institution owned by its memebers.

Fed to Congress: “Pound Sand”. The Congress has no rights to make the Fed do anything. Hell, even Federal Courts can’t make the Fed cough up Freedom of Information Act requested docs. You see that law applies to the Government and the Fed isn’t a government organization.

You, silly citizen, have no more right to demand the Fed provide you with their work than you do to demand that Citibank do so.

Speaking of Citibank they have a lot more juice with the Fed than the Congress. At least they are part owners.

If I am not free, then SAY SO CLEARLY and NOW!

YOU ARE NOT FREE. YOU ARE A SERF OF THE UNITED SERFS OF AMERICA. (Geeze Dude, I thought we'd been over this already.)

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