UIGEA Hearing Addresses Online Gambling Ban

In a recent Congressional hearing on internet gambling last Wednesday, federal officials described the failure of the Unlawful Internet Gambling Enforcement Act (UIGEA) to curtail online gambling in the United States. The hearing, titled "Proposed UIGEA Regulations: Burden without Benefit?," gave supporters and critics of the bill the opportunity to finally address the controversial act which went into effect in 2006.

The biggest complaint was that the ban is so ambiguous that enforcing it is next to impossible. "I think it is very difficult without having more of a bright line about what is intended to be unlawful Internet gambling," said Louise Roseman who oversees the Fed's bank operations. Even the US Congress isn't sure what the act means and the vagueness continues down to the banks who are supposed to be enforcing it. Though individual gamblers are not prohibited from using online casinos, it is illegal for banks to transfer money from gamblers to the casinos and vice versa.

As it stands, banks are expected to enforce the ban with no existing regulations or guidelines. This is made more difficult when online casinos can easily mask their transactions. Congressman Barney Frank has proposed an answer to this bill, titled the Internet Gambling Regulation and Enforcement Act and described the UIGEA as "a rather bizarre piece of legislation."