Over Thanksgiving, mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) was postponed six months to June 1st, 2010. Poker News Daily sat down with internet gambling expert Nelson Rose to get his take.
Poker News Daily: What were your thoughts on the postponement of mandatory financial services industry compliance with the regulations of the UIGEA?
Rose: When powerful Congressmen like Barney Frank (D-MA) and Harry Reid (D-NV) tell administrative agencies to do something, they’re going to pay a lot more attention to it than when out of power members of Congress like Jon Kyl (R-AZ) weigh in. They also know that the UIGEA is a piece of garbage that was dropped on their heads. That happens to administrators: Congress passes something undoable and makes agencies figure it out.
PND: Talk about some of the pressures put on the Federal Reserve and Treasury to make this decision.
Rose: It was the Federal Reserve and Treasury, but they made a big point of saying that they consulted the Department of Justice, which they were required to do. That means that the Attorney General of the United States signed off on this.
Under President George W. Bush, we had some right-wing religious fanatics who were anti-gambling in charge, but we also had the Department of Justice that understood there were higher priorities. They knew they didn’t have a lot of good law on their side, so they were running a war of intimidation. Now, we have a sane Department of Justice led by people who understand priorities and that internet gambling isn’t a big deal compared with all of the other criminal problems in the world. Yet, there are still offices that have gone further than they did during the Bush administration by seizing the money of online poker players.
PND: Do you foresee sensible internet gambling legislation being passed in the next six months?
Rose: I think that this is the start of the process. The Democrats won’t do what Bill Frist (R-TN) did and try to ram this through when no one is looking by attaching it to a must-pass bill. They’ll have hearings, but unfortunately for everyone who is interested in it, it’s still a very low priority.
PND: What would have happened if the December 1st UIGEA compliance deadline stood?
Rose: I think nothing would have happened. I’ve talked to some banks and payment processors. They’re taking it very seriously, but they understand that the UIGEA rules specifically say don’t look at individual transactions, so they’re not going to do that. They’re concerned with setting up new accounts and no one is setting up illegal gambling operations in the United States.
PND: Give us your thoughts on overblocking, which crept up when legal online lottery transactions in North Dakota and New Hampshire were being denied.
Rose: The regulations make it clear not to look at individual transactions, but there are a lot of operators involved in things like horse racing, skill games, and free entry games that they would not do business with if they didn’t have legal opinions like the ones I’ve been writing. That’s the reason I think the regulations are actually helpful: they create a safe harbor that the banks can use to say that they’re in compliance with the UIGEA because they’ve sought out legal opinions.