Oops. Did Congress accidentally legalize cyber gambling? Federal regulations issued Wednesday to enforce a law passed two years ago by Congress aimed at outlawing internet gambling might achieve precisely the opposite effect.
Faithful to the broad strokes of the Unlawful Internet Gambling Enforcement Act of 2006, the Treasury department’s controversial 121-page rule exempts intrastate cyber gambling that is authorized by sovereign states or tribes, and sanctions online wagering under federal interstate horse racing gambling laws.
The rules also exempt individual gamblers from enforcement, baring the government’s regulatory teeth only at commercial gambling companies that operate cyber casinos and cyber bookie joints.
The sticking point is that neither the law nor these companion regulations define “unlawful Internet gambling.” That task is left to the myriad industry of U.S. banking and financial institutions which the law, in effect, deputizes as the federal cyber gambling police _ and that powerful interest group is most unhappy to be saddled with the job.
In recent days members of Congress, bankers and internet gambling operators have raged at Treasury’s “midnight rulemaking” in the waning hours of the Bush administration.
In a letter earlier this week House Financial Services Committee Chairman Barney Frank urged Treasury Secretary Henry M. Paulson Jr. to set aside “these…deeply flawed regulations to permit the incoming administration the ability to review the consequences of such a significant policy decision.”
Frank is no gambling foe. His committee this year approved pending legislation to draw the much-criticized UIGEA more clearly and _ at least and perhaps _ also exempt games of skill like poker which is driving much of the growth in the $15 billion worldwide internet gambling industry.
Another member of Congress this week raised conflict of interest questions over Treasury’s 11th-hour rulemaking and the perceived influence of a White House operative and former lobbyist for the National Football League that has long opposed internet sports betting as a threat to its integrity.
What a mess.
The only saving grace is that Treasury pushed the effective date of the new rules to Dec. 1, 2009.
By or before then Frank and pro-gambling allies in Congress and the new administration may well have repealed the ill-conceived UIGEA with a more reasoned national policy.
If not, however, the states and tribes appear to be quite free under these new rules to let the cyber dice roll _ and start raking in a new and lucrative category of tax dollars.
Nevada, New Jersey and a handful of other states have been held back so far only by threats of prosecution from the Justice Department _ which now may be handcuffed itself.
Legal intrastate gambling may prove to be the game changer that rapidly paves the way to legal interstate and ultimately international gambling by Americans on the Web.
And that will be a game changer for society.
To read the entire rule
click here.
Submitted by Rick Alm on November 13, 2008 - 9:46am.
Oops. Did Congress accidentally legalize cyber gambling? | Lucky Numbers 
Did Congress Just Legalize Online Gambling? 
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